Liam Byrne: I am grateful to the hon. Gentleman for that question. I know that he has some expertise in the subject and I welcome the speech that he made earlier, to which I listened carefully.
	It is worth pointing out that, before the new GP contract was introduced, fewer than 5 per cent. of GPs provided their own out-of-hours cover. The new arrangements will ensure that the skills mix and team working that are well established in both primary and secondary care apply out of hours, accessed through a single call to NHS Direct.

Liam Byrne: The hepatitis C action plan is an important part of that but it is up to primary care trusts to ensure that their contractual arrangements are audited effectively so that remedial action is taken when quality is found not to be up to the standard that it needs to be.

Liam Byrne: Primary care trusts are the local health professionals responsible for ensuring that needs in their communities are addressed. That is why they have a responsibility to audit the care that general practices provide in their area and take remedial steps whenever they find that it is not up to the mark.
	I stress that the new GP contract is delivering some important gains for constituencies throughout the country. The fact that 99.9 per cent. of people see a GP within 48 hours or a primary care professional within 24 hours is due to the new contract. Achievement in the quality in outcomes framework exceeds 95 per cent. Again, that is down to the new contract. Those changes are important. I am sure that that is why the chair of the British Medical Association's General Practitioners Committee said:
	"I believe the introduction of the new GP contract marks the beginning of a change that will be better for patients and better for everyone working in general practice."
	That includes people in the hon. Gentleman's constituency.

Andrew Murrison: The Under-Secretary knows that one aspect of traditional primary care that is most highly valued by patients is GP support for community hospitals. Yet following the introduction of the new GP contract, GPs' out-of-hours cover for community hospitals has been greatly reduced. What assessment has he made of the threat to community and cottage hospitals, following the introduction of the new contract? What will he do to ensure their long-term survival?

Patrick McFadden: I thank the Secretary of State for her reply. Does she agree that, where choice has been introduced so far—for example, in offering patients a shorter waiting time in exchange for having their operation done somewhere other than their local hospital—it has been a success? Does she also agree that, while choice will not operate in exactly the same way in the public and private sectors, it is essential that as the Government increase investment in the NHS to record levels, it should be matched by the empowerment of patients to ensure that they have increased control over the timing, nature and location of their treatment?

Patricia Hewitt: I discussed this very matter with Commissioner Kyprianou some two weeks ago, and my hon. Friend the Under-Secretary of State for Health, the hon. Member for Don Valley (Caroline Flint) discussed it with patients' representatives and the industry just last week. We will continue to press for the lightest-touch-possible implementation of the directive, and we will ensure that the providers who are already making available a wide and growing choice of vitamin and food supplements to the public in Britain and elsewhere can continue to do so. That is what the providers want to be able to do, it is what the public want, and we will ensure that they can continue to get it.

Nicholas Winterton: What a lovely answer from a most charming Minister. May I ask her, however, why the draft guidance from the National Institute for Health and Clinical Excellence states that those four valuable drugs, which could bring great benefit to those suffering from Alzheimer's disease, should not be prescribed on the national health service?
	Two meetings were held here last week, in which the Alzheimer's Society was involved. At both, horror and condemnation of the guidance were expressed. Given that professional psychiatrists were not allowed to sit on the appraisal panel and that the advice of those who sent the panel evidence has been ignored, will the Government intervene immediately and insist that the drugs be prescribed to these vulnerable people on the NHS without delay?

Tom Harris: I beg to move,
	That leave be given to bring in a Bill to amend the Computer Misuse Act 1990; and for connected purposes.
	In moving this motion, may I first of all pay tribute to the work undertaken by the all-party group on the internet, which carried out a thorough review of the Computer Misuse Act 1990, and whose recommendations form the basis of the Bill that I present today? I want particularly to thank my hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt). He presented a similar Bill to the House in March of this year, but in the end it was defeated by the timetable for the general election.
	My Bill will revise the 1990 Act to take account of commitments made in European instruments in respect of combating and effectively punishing attacks against computers, and it will update the Act in other areas. It will amend section 1(3) to increase the term of imprisonment for a related offence from six months to two years. It will amend section 3(7) to increase the term of imprisonment for a further related offence from five years to 10 years. It will amend section 3 in order to clarify that all means of interference with a computer system are criminalised. And in particular it will ensure that adequate provision is made to criminalise all forms of denial-of-service attacks. It will also give effect to article 6(l)(a)(i) of the convention on cybercrime, which requires criminalisation of the distribution of, or making available of, a computer password through which a computer system is capable of being accessed, with intent to commit an offence.
	This Bill will, I hope, meet with the House's approval. It contains only six clauses, has no financial implications, implements measures that have been approved by Ministers and Parliament and is, I hope, relatively simple. As last year's report by the all-party group on the internet demonstrates, these measures already have cross-party support. I trust this will remain the case after I finish my speech. As the report pointed out and as every Member of this House will doubtless accept, the worldwide web has changed out of all recognition in the past 15 years, as has the nature of cybercrime. The media like to imagine that hacking, virus proliferation and denial-of-service attacks using e-mail are the product of bright but lonely and socially challenged teenagers sitting in their bedrooms. That is an outdated, inaccurate and, I think, dangerous notion. Those who regularly and increasingly hold website operators to ransom are more likely to be members of an organised crime syndicate than the school computer club. It is time that cyber crime was recognised for the serious crime that it is.
	Following the recent sentencing of teenager Joseph James McElroy to 200 hours of community service for breaking into a US Government laboratory system, detective chief superintendent Len Hynds, the former head of the national hi-tech crime unit, called on the Government and the courts to reform sentencing policy to reflect the damage caused by hackers breaking into government and private sector computer systems. He said:
	"The internet has grown up and we need to say to people who think its fun to rifle through people's private files that they are actually committing a crime".
	My Bill seeks to specify a new offence of denial of service. A denial-of-service attack occurs when a deliberate attempt is made to stop a computer performing. Examples include attempts to flood a network, thereby preventing legitimate network traffic; attempts to disrupt the connections between two machines, thereby preventing access to a service; attempts to prevent a particular individual from accessing a service; and attempts to disrupt services to a specific system or person.
	Denial-of-service attacks can essentially disable one's computer or one's network. Some denial-of-service attacks can be executed with limited resources against a large, sophisticated site. For example, an attacker with an old PC and a slow modem may yet be able to disable much faster and more sophisticated machines or networks. One form of such attack could mean a large number of remote computers being orchestrated to attack a target at the same time. In some cases, the attacks overwhelm the connecting links to a machine rather than the machine itself. That can result in significant collateral damage that extends beyond the machine being attacked. Denial-of-service attacks are extremely common on today's internet. At the lower end of effectiveness, the blips in traffic are hardly noticeable, but we are told of cases at the other end in which large university networks have been made unusable for hours at a time.
	The chief constable of Greater Manchester, Michael Todd, was bombarded with thousands of threatening e-mails in a denial-of-service attack shortly before the May Day bank holiday this year. At one point, 2000 e-mails were being sent every hour. The purpose of the attack was to crash the force's computer systems through the volume of e-mails being sent. Cambridgeshire police were subject to a similar denial-of-service attack almost two years ago, when thousands of spam e-mails told recipients that their credit cards were about to be charged for an iPod that they had purchased unless they phoned a customer service number. The customer service number turned out to be the switchboard at Cambridgeshire police, which was deluged by thousands of people who had received the hoax e-mail. Closer to home, a gun control website contacted me two years ago to complain that one of my constituents, a gun enthusiast, had bombarded the site with so many e-mails over a short period of time that their server had crashed.
	The Computer Misuse Act 1990 came into force on 29 August 1990 and specifies offences for attacks against computer systems or data. Criminal denial-of-service attacks are regularly made on gambling websites both in the United Kingdom and elsewhere. Such attacks are invariably accompanied by demands for amounts between £10,000 and more than £100,000 in order to make the attacks stop. The impact on gambling businesses has been severe. The national hi-tech crime unit has become involved in the investigations, but the perpetrators are believed to be based abroad, which sets some limits on what can be achieved quickly.
	The second part of the Bill deals with the length of sentences. At present, offences under section 1 of the Computer Misuse Act 1990 can be dealt with only in a magistrates court, where the maximum penalty is six months in prison and/or a fine of £5,000. A conviction in a higher court currently applies only to offences defined in sections 2 and 3 of the Computer Misuse Act. In those cases, the maximum penalty is five years in prison or an unlimited fine.
	By increasing the tariff on these crimes, the House would be sending a message to the courts and the public prosecution service that these crimes must be taken seriously and that, where appropriate, custodial sentences must be applied. Home Office figures show that, when an offence under the Computer Misuse Act is the principal offence with which someone is charged, only about a third of those found guilty are given custodial sentences. When such an offence is not the principal offence, the proportion is very small indeed.
	It is regularly claimed that the cost of cleaning up virus or worm attacks runs into billions of pounds. The current level of sentences does not reflect the seriousness of such offences. This Bill would therefore raise the maximum sentence for a conviction under section 1 of the 1990 Act to two years. That would have a number of indirect benefits. It would make an offender subject to extradition procedures, and also make it possible to prosecute for a criminal attempt, even where such an attempt had not succeeded.
	Before I conclude, I wish to draw the House's attention to a recent NOP survey conducted on behalf of the national hi-tech crime unit. It estimates that the minimum cost of the impact of high-tech crime on UK-based companies with more than 1,000 employees is no less than £2.5 billion every year.
	As the worldwide web grows both in size and in its influence on all our daily lives, the threats posed to all of us by cybercrime also grow. Although high-profile denial-of-service attacks have been made against e-commerce and, especially, gambling sites, the UK Government and the country's critical infrastructure are also vulnerable. It is essential that we have a law in place to make prosecution possible when offences are committed, because that will send the strong and unambiguous message that e-crime will be treated with the utmost seriousness.
	I commend the Bill to the House.
	Question put and agreed to.
	Bill ordered to be brought in by Mr. Tom Harris, Mr. Ian Austin, Mr. John Spellar, Gordon Banks, Michael Gove, Jessica Morden, Ms Emily Thornberry, David Mundell, Derek Wyatt, Charles Hendry, Mr. Alan Reid and Michael Fabricant.

George Osborne: I beg to move,
	That this House commends the Parliamentary Ombudsman and the Citizens Advice Bureau on their reports on Tax Credits; notes with concern their conclusions that many thousands of low income families are suffering financial hardship as a result of the serious problems with the administration of tax credits; further notes the huge cost to the taxpayer of these problems; calls on the Government to implement as soon as possible all the Ombudsman's recommendations to improve the tax credit administration; in particular calls on the Government to adopt the Ombudsman's recommendation to set up a statutory test for recovery of excess payments of tax credits consistent with the test that is currently applied to social security benefits, with the right of appeal to an independent tribunal and calls on HM Revenue and Customs to suspend all recovery of tax credit overpayments until this reform has been completed; and calls on the Chancellor of the Exchequer to explain the Government's failure to provide low income families with the service they deserve; and requests that he conduct a fundamental review of the structure and administration of tax credits, as recommended by the Ombudsman.
	This is my first opportunity in the House to express my sadness and sorrow to the victims of last week's murderous bombs, and to the injured who continue to suffer. I have just seen pictures on the television news of those who died. That brings home in a very graphic way how many lives have been so cruelly snatched away from us. I think that is an appropriate opening to an Opposition day debate, as democratic debate must continue undaunted.
	Today's debate is about people like Mr. Crow and his family, from Dover. They have two kids, a mortgage and no spare cash. Mr. Crow recently took a job as a carer, and became entitled to tax credits. When his pay rose, he did what he was supposed to do, and informed the Inland Revenue. He was told that the increase in his pay was to be disregarded. A year later, he has been told that he has been overpaid and that he now must pay back the difference. His working tax credit has been reduced from £35 a week to £2.44 for the entire month. That family has been forced to go into debt or lose their home.
	This debate is also about people like my constituent Helen Thompson, a single mother. She contacted the helpline and was told that she could keep an overpayment of £3,000, even though she had offered to pay it back immediately. Out of the blue, the Revenue demanded that money back, with the result that she could not meet her child care costs. She faced losing her job, and only the intervention of my constituency office caused the Revenue to change its position.
	This debate is also about people like the lone parent in the report by Citizens Advice, who received no tax credit payments whatsoever for the last few weeks of the financial year. She had to resort to Salvation Army food parcels to feed her children.
	Every Member of the House knows that, sadly, those are not isolated examples. Citizens Advice handled 150,000 cases in the last year alone. The parliamentary ombudsman now spends a quarter of her time on tax credit cases, and the Revenue has recently admitted to me in writing that it is dealing with 51,000 complaints, 9,000 of which were referred to it by Members.
	The blunt truth that the Government have to confront is that the tax credit system
	"is failing the very families most in need of extra money, causing hardship that the system is designed to prevent, and making it more difficult for people to save or to hold down a job, rather than supporting saving and employment."

George Osborne: We are committed to policies that reduce child poverty. We are not committed to policies that have increased child poverty. As the IFS said, the introduction of the new tax credits has led to an increase in child poverty by about 90,000 after housing costs and 80,000 before housing costs. The hon. Gentleman says that the system has helped all those families, but he has obviously not read the reports that we are debating today; for example, the CAB report, which states that the tax credit system has plunged many below the breadline and into mounting debt, or the parliamentary ombudsman's report, which talks of families having to borrow money from family and friends to support their children, using up their life savings or running up credit card debts to pay for child care costs, buy food and get to work.

George Osborne: Thank you, Mr. Speaker. Perhaps the hon. Gentleman will catch your eye later, so that he can explain that the error rate is not 3 per cent. He should consider his own constituency. Of the 8,200 tax credit awards there, 1,100 were unpaid and 2,600 were overpaid. That is very considerably more than 3 per cent. Indeed, in total, the overpaid and underpaid awards come to almost half the entire tax credit awards in the country. We are not talking about small amounts of administrative error.
	We have finally managed to bring Browne to the Dispatch Box, but with respect to the Chief Secretary, we have got the wrong Mr. Browne. The Prime Minister has said sorry and the Paymaster General has said sorry, but we have not heard a word from the architect of tax credits himself. Indeed, the last time that the Chancellor answered any questions on tax credits in Parliament was more than a year ago, and he has had plenty of opportunities to do so.

Patrick McLoughlin: Will my hon. Friend tell us later how much the implementation of the tax credit system has cost the country? Bearing it in mind that it is fundamental to a lot of people, how much will all the complaints and the wrong awards cost the nation? How much of the money that we want to go to people who need it is thus not arriving there?

George Osborne: I gave way to the hon. Member for Chorley and I now want to make progress.
	How could the Paymaster General have possibly told Parliament:
	"The system has been stable and performing very well . . . for well over a year"?—[Official Report, 7 February 2005; Vol. 430, c. 1254W.]
	The parliamentary ombudsman certainly found it puzzling. She says in her report:
	"the cases I have investigated lead me to the conclusion that such reassurances"
	by the Paymaster General
	"did not give a complete picture of what has been happening".
	That is a devastating and, as far as I am aware, an unprecedented rebuke of a Minister by Parliament's watchdog. Why did the Paymaster General say that the system has been performing very well? Did she not see what every other MP sees in their surgeries, or did she choose not to tell Parliament the whole story? I hope that she gives a full account of herself today.
	What hundreds of thousands of low-income families want to know is not how the Government got into the mess but how they are going to get out of it. That is the second issue. The Paymaster General told us on 26 May this year that she was taking steps to sort out some of the ongoing problems. It was at least a recognition that we were no longer dealing with teething problems. I welcome those proposals—for example, making the award notices more intelligible and improving the helpline service—but frankly the reforms go neither far nor fast enough.
	Citizens Advice agrees with that, as the Paymaster General knows. It explains that even the modest proposed changes could take up to 18 months to implement. That is 18 months of poor information, more bad advice and more inadequate support. It is not acceptable. The Chief Secretary should confirm—I assume by his presence that he is now in charge of tax credit policy—that the Government are going to implement in full the 12 specific recommendations in the parliamentary ombudsman's report. They go much further than the changes announced by the Government and include clearer information about overpayments and additional tax credits, training for staff to recognise cases of hardship, and automatic payment of additional tax credits to overpaid families in receipt of income support.
	Will the Chief Secretary also immediately suspend plans to move a further 800,000 of the lowest income families who currently receive their tax credits from Jobcentre Plus to the Treasury's chaotic systems until the problems are resolved? No one else should be subjected to yet more misery and hardship at the hands of this Treasury.
	There is a specific recommendation on the recovery of overpayments that is particularly important. The ombudsman says that she does not consider that
	"the present internal system for determining whether sums should be repaid operates in a fair and transparent manner."
	That is why she suggests introducing a statutory test for the recovery of overpayments and a right of appeal to an independent tribunal—in other words, a test that puts the onus on the Revenue to get the awards right in the first place and that is consistent with that which has long been applied to social security benefits, which everyone but the Chancellor of the Exchequer knows are the same as tax credits.
	I agree with the ombudsman on that statutory test. It is why it is part of the motion. So does the right hon. Member for Birkenhead (Mr. Field) who, with other Labour MPs, has tabled an early-day motion on the subject. Will the Chief Secretary confirm that the Government will introduce that statutory test and whether he is going to implement the other recommendations in the ombudsman's report?
	That brings us to the third issue. In the absence of a statutory test, what is the Government's position on reclaiming overpayments? We have finally discovered that, in the first year of operation, the Revenue overpaid an astonishing £1.9 billion to 1.9 million people. When my hon. Friend the Member for North Thanet (Mr. Gale) asked the Prime Minister about overpayments, he said:
	"the Paymaster General has said already that we will not seek to get the money back if the error is on the part of the Inland Revenue."—[Official Report, 22 June 2005; Vol. 435, c. 798.]
	That is what the Prime Minister said at the Dispatch Box. In case people think that it might have been a mistake, he repeated it a week later at Prime Minister's questions. That is not consistent with what the Paymaster General is telling us. She says that overpayments caused by errors by the Inland Revenue will only be written off if the claimant could not possibly have spotted the error themselves. Indeed, we are now told—perhaps the Chief Secretary can confirm this—that 98 per cent. of overpaid tax credits have been automatically reclaimed. Is that correct? If it is, it is very different from what the Prime Minister promised people from the Government Dispatch Box.

Frank Field: The hon. Gentleman says that he is coming towards the end of his speech. I hope that, before he resumes his place, he will answer one question that poses in a different form questions that have already been asked. No one can say that my right hon. Friend the Chancellor of the Exchequer is not keen to redistribute income. Taxpayers have given up a 5p reduction in the standard rate of tax to finance tax credits. If the hon. Gentleman were Chancellor, would he use the money in exactly the same way or in a different way?

George Osborne: That is an entirely fair question and it is literally a matter to which I am turning. Perhaps the right hon. Gentleman, who has a bit more patience than some of his right hon. and hon. Friends, will listen for a second. As he knows, there is a growing body of opinion that says that we need a far-reaching review of the tax credits system. In her review, the ombudsman says that it is rightly a task for Parliament and the Government—not for her—to address the
	"fundamental question as to whether, for people on modest incomes who have to budget and plan their finances carefully to manage their lives, the inbuilt instability or uncertainty really works."
	The chairman of the Inland Revenue, the man charged with administering tax credit, thinks that we need a review. In the Financial Times last week, he said:
	"if there are real problems in discharging the policy"—
	on tax credits—
	" . . . then you'll have to debate what the right policy is."
	We know that the Prime Minister would probably support a review. It is an open secret that he has never liked the Chancellor's tax credits. If we read the Westminster Hall debates that have been held on this subject, it is clear that a growing number of Labour Members have called for a review. Even the hon. Member for North Durham (Mr. Jones), who, I understand, is one of the Chancellor's henchmen, has called for a fundamental, root-and-branch review. All those Members are right. We need that fundamental root-and-branch review. We need to ask whether the current system of annual payments can ever meet the needs of people whose income and circumstances can change week by week. We need to ask whether people on low incomes will ever have the flexibility in their budgets to repay the overpayments that are an inherent part of the current tax credit system.
	We need to ask whether we should consider moving to a system where payments are fixed for longer and require fewer changes. That is something to which I am attracted but it is something that should be reviewed before we come to a definite conclusion. We need to ask whether it is right that hard-working families on average incomes are paying taxes to fund means-tested benefits for people earning £66,000 a year. That is something that a review should consider.
	Tax credits were designed to tackle child poverty, but as I have said repeatedly, the Institute for Fiscal Studies has shown that their administration has plunged people and their children into poverty. There could hardly be a greater indictment of the Chancellor's policy. Families have been pushed below the poverty line by Government incompetence. Single parents have been forced to rely on Salvation Army food parcels to feed their children. Tens of thousands of people have been driven to despair and hardship.

Des Browne: I beg to move, leave out from "House" to end and add
	"supports the Government's strategy to make work pay and provide financial support to families through tax credits; welcomes the fact that over 6 million families and 10.5 million children are benefiting from tax credits, with first year take-up of around 80 per cent., compared to just 57 per cent. for the Family Credit system inherited by the Government; recognises that far more families than ever before are benefiting from help with childcare costs; notes that tax credits are central to the Government's goal of abolishing child poverty; further notes that tax credits have helped ensure there are 1.5 million fewer children in poverty and have helped 275,000 lone parents into work; recognises the need to balance the demands for a simple system with the need for a system that responds to people's changing circumstances, giving most help to families when they need it most; acknowledges the IT and administrative problems that accompanied the early stages of implementation; and welcomes the measures announced by the Government for improving the administration of the system."
	May I echo the entirely appropriate words of the hon. Member for Tatton (Mr. Osborne) about the sad events and consequences of the terrorist attack in this great city last week? We have all been moved and impressed by the dignity and resilience of the people who were tragically affected by those events. Our thoughts continue to be with them, and I am grateful to the shadow Chancellor for his words as, I am sure, are all hon. Members.
	The shadow Chancellor made two allegations about my right hon. Friends misleading the House, whether inadvertently or otherwise. The accusation that my right hon. Friend the Paymaster General misled the House about the stability of the IT system is incorrect. I accept that the shadow Chancellor relied on the ombudsman's report for his assertion, and that he was reporting it to the House. My right hon. Friend, however, did not mislead the House. There has not been a failure of the tax credit computer system since tax credits were introduced in April 2003. The Paymaster General made a statement about the performance of the IT system, its speed and reliability over the previous year. I am happy to confirm that the system has been performing well in terms of speed and availability for that period. There were, of course, well-publicised problems—we will come on to deal with some of them—in the early days when the system did not perform as expected. With a system of this size and complexity, there are occasional glitches, but I am happy to refute the assertion that my right hon. Friend the Paymaster General misled the House.
	As for the assertion that my right hon. Friend the Prime Minister misled the House by saying that overpayments due to error would be written off, that is not the case. Both the Prime Minister and the Chancellor reported accurately the policy that Her Majesty's Revenue and Customs write off overpayments where there is official error. There is, however a long-standing principle that official error requires both a mistake on the part of the Revenue and reasonable belief on the part of the claimant that they were being paid the right amount. Neither the Prime Minister nor the Chancellor were doing anything other than reporting the long-standing principle.

Stephen Dorrell: The Chief Secretary's defence of the Prime Minister is based on the proposition that there is a longstanding definition of the concept of official error, which includes the implied terms to which the Chief Secretary refers. If the definition is so longstanding, can the right hon. Gentleman point to any previous example of a Government claiming that in their defence?

Des Browne: No, I think I have said enough on the matter. I intend to make some progress with my speech.
	As I said, I intend to answer each of the points made by the hon. Member for Tatton, but I find it extraordinary that in the speech that we have just heard, there was barely any mention of the benefits that the Government's system of tax credits is bringing to millions of hardworking families right across Britain. Even when the shadow Chancellor was given the opportunity to comment on what is now accepted in relation to child poverty, he could not bring himself to concede that that progress had been made.
	Six million families now benefit from tax credits. As a result, 10.5 million of the nation's 13 million children now receive more generous support—that is 10,000 families on average in each of my right hon. and hon. Friends' constituencies; indeed, in each right hon. and hon. Member's constituency. The shadow Chancellor is no doubt armed with figures from my constituency, as from everybody else's, about the number of overpayments or underpayments that may have been made, but the fact is that on average, across the United Kingdom, 10,000 families in each of our constituencies are benefiting from this policy.
	In the first year of the new system, take-up of tax credits was around 80 per cent., compared with just 57 per cent. for the family credit system that we inherited when we came to power in 1997.

Des Browne: The hon. Gentleman anticipates part of the speech that I wish to make. I do not accept that all those calculations are in error, and it should become clear to him, as I develop my remarks, why that is. On a pedantic point, the figure of 50 per cent. as regards the calculations involving overpayment and underpayment is not entirely correct—although it is not far short of correct.
	As a result of the Government's strategy to make work pay and to provide financial support for families through tax credits, there are now 1.5 million fewer children in poverty, and 275,000 lone parents have been helped into work. Reforms since 1997 mean that by October this year families with children will, on average, be better off to the tune of £1,400 a year in real terms; and those in the poorest fifth of the population will be, on average, £3,200 a year better off. While it is right that we should debate the effectiveness of the administration of the system—I shall come to the specific points made by the shadow Chancellor in due course—the extent to which hardworking families have benefited from credits and the contribution that credits have made to tackling poverty is the proper context in which today's debate should be seen.
	Before I deal with administration, I want to remind the House why we introduced the tax credits system and what it replaced. The family credit system that we inherited had several problems, as identified in the 1998 report on work incentives by Martin Taylor. In particular, four areas gave us considerable concern: first, it acted as a disincentive to finding work; secondly, it was an insufficiently generous award; thirdly, it was fundamentally inflexible and unable to take into account changes in circumstances; and fourthly, it gave too little assistance with the costs of child care provision.
	I might point out that the Liberal Democrats accepted that analysis at the time, and it was further supported by their then spokesman, the hon. Member for Northavon (Steve Webb).

Des Browne: I have no such intention, because most of those amendments were withdrawn after debate and explanation of the way in which the system would work, and after the hon. Member for Northavon had expressed satisfaction with those explanations.
	At some stage, it might be useful to hear from the Liberal Democrats why they changed their minds on the analysis of the support that working families need, as reflected in their recent manifesto. It will be interesting to hear the reason for that change of heart.
	We introduced the working families tax credit six years ago to deal with some of the issues that the Taylor report—and, indeed, the Liberal Democrats—raised. That was the start of the necessary process of reform. We tried to ensure that work paid more than being on benefits, that take-up increased and that we gave proper support for child care costs. Today, the child tax credit and the working tax credit continue that approach and deliver the desired outcomes more effectively.
	The credits also offer the chance of paying the child tax credit directly to the main carer, mainly the mother. For the first time, tax credits can be adjusted to reflect changes in the number of children in the family, working hours, child care costs or family income. That means that we can provide the greatest support to families who need it most when they need it most.
	We need to acknowledge the value of tax credits and the help that they provide in people's everyday lives. Today's system replaces an inflexible and unfair approach that did little to incentivise people into work and little, if anything, to lift children out of poverty.
	Despite the criticisms, support for the approach came not only from the Liberal Democrats but from the recent Citizens Advice report. Part of our disadvantage as Members of Parliament is that, when we refer to such substantial documents, we cannot all read them, and they are capable of supporting different views. The first paragraph of the Citizens Advice report states:
	"We firmly support tax credits as a vehicle for directing substantial extra money towards lower income families."
	The Government share the organisation's ambition for the system to work effectively for all who are entitled to extra help.
	Let me read part of the foreword to the health service ombudsman's report, to which the shadow Chancellor referred so freely. The third sentence of the foreword states:
	"This report does not suggest that the new tax credit system is in general disarray; on the contrary it recognises that, given the scale of the undertaking, its introduction has been broadly successful".
	Hon. Members might be surprised that that was the ombudsman's view, given the shadow Chancellor's deployment of selective quotations from her report.

Des Browne: No, I do not, and such advice should not be given, but I say to the shadow Chancellor what I said to the hon. Member for Dundee, East. If he brings to my attention the detail of such calls—[Interruption.] With due respect to the shadow Chancellor, the fact that something is in the report means nothing; it does not mean that it happened or that it is anything more than an anecdote. If it did indeed happen, it should not have, but it would help if those who have information supporting such assertions were to make it available. We have the advantage that these calls are recorded, and that the official who dealt with a particular call can therefore be identified. As a result, we can look at the circumstances of the relevant part of the conversation, and determine the advice given and whether it was properly understood by the caller. I am not disputing that the report says what it says; I am simply pointing out that if we are given the details of a particular case, we can chase it up.

Des Browne: I hear what the right hon. Gentleman is saying, and if that is what I said, I accept entirely his admonition; I should reflect on it and I will do so. I should point out in my defence that in answering the shadow Chancellor's question, I did not understand him to be saying that this assertion emanated from the ombudsman's report. I do not personally recall it being in that report; that said, I do not pretend to recollect the report comprehensively. However, if the facts that instruct the right hon. Gentleman's admonition are correct, I accept it and I will deal with it.

Des Browne: I want to make some progress and take the opportunity to announce plans for providing child support through child tax credits for claimants on income support or jobseeker's allowance.
	On 22 June my right hon. Friend the Paymaster General told the House that, following her statement of 21 October 2004, she continued to keep under review the planned migration to child tax credit of those families still receiving support for children through income support and jobseeker's allowance. Since then, she has considered very carefully the reports from the ombudsman and NACAB. She has also considered the views expressed by many hon. Members, for which we are grateful.
	I confirm that it remains the Government's firm intention to migrate all income-based support for children into a single, seamless stream of support, delivered through child tax credit. However, after consultation with my right hon. Friend the Secretary of State for Work and Pensions, my right hon. Friend the Paymaster General has decided that, subject to further review and consideration over coming months, the migration of the remaining families will begin during 2006. That will safeguard continuity of payment, and provide reassurance to that particular vulnerable group. Meanwhile, I again confirm that families will continue to receive the same level of financial support through their benefits as they would have received from child tax credit.
	As I have already told the House, nearly 10,000 families in each constituency now benefit from tax credits. Let no one have any doubt: tax credits have brought real progress in delivering key priorities for welfare reform. They direct more help to those who need it most, they respond to significant changes in circumstances and income, and they give fairer results. We acknowledge that there have been administrative problems, but the policy is the right approach, which is aimed at tackling poverty and unemployment and helping out hard-working families.
	Tax credits have made a real difference to people. That difference demands the respect of this House, and of Opposition Members.

David Laws: This important debate has so far not been very enlightening or useful. I hope that the Government's policy on tax credits will be a little clearer at the end of the debate than has been the case over the last 10 minutes. This debate is vital in holding the Government to account in respect of a policy area where there have been serious problems, and also because the administrative problems in the tax credit system have hit people on the lowest incomes in the country—the very people whom the Government's policies are intended to help.
	The hon. Member for Normanton (Ed Balls) has been a big contributor in this policy area and many others. Given the problems of the last couple of years, I can quite understand why he would prefer to concentrate on the big picture rather than on the smaller one. He is entitled to raise some of the matters that he has raised, and I shall touch on some of them at the end of my remarks.
	The hon. Gentleman and the Chancellor introduced tax credits to help people on low incomes, so they must be worried about the problems that have been created. The book by Robert Peston—in which I believe the hon. Gentleman played a part—contains a passage from an interview with the Chancellor on tax credits. The thrust of the Chancellor's remarks is very similar to what the hon. Gentleman said earlier. The right hon. Gentleman said:
	"I think tax credits have been misunderstood. People have focused on the mechanism, a bureaucratic issue, when it is in the end about citizenship, integrating tax and benefits. In the long term, these will come to be accepted as part of the economic and social framework of the country."
	The Chancellor and the hon. Gentleman may well be right, but meanwhile people suffering from the system's endemic problems of overpayment and underpayment turn up at advice centres in every hon. Member's constituency. If the hon. Gentleman intends to give that answer to those who come to see him, I assure him that he will receive pretty short shrift.
	Ministers have been aware of the problems for many months, at least, and have made several statements in an attempt to resolve them, and I acknowledge that the Chief Secretary helpfully accepted a lot of interventions. However, he was depressingly unclear about which recommendations in the ombudsman's report have been accepted and which have not. When the Paymaster General winds up, I hope she will give a clear answer to that. In her 22 June statement, she gave the impression that she accepted the ombudsman's report in total. However, when we look at the detail we find that what she actually said was that she accepted the administrative changes proposed by the ombudsman. She did not say that she accepted all the recommendations, and it is of course the non-administrative changes that are the most significant. I thought we were making progress when the Chief Secretary indicated about 10 minutes ago that the Government accepted the ombudsman's second recommendation. I am happy to take an intervention from the right hon. Gentleman if he wants to clarify that point. The recommendation is crucial and touches on whether the recovery mechanism for tax credit is lawful or whether it constitutes maladministration.
	The Chief Secretary clearly indicated that the Government would accept the ombudsman's second recommendation not to claw back overpayments until an assessment had been made, under the code of practice, of whether they should be clawed back. Now, under pressure, and with notes flying in various directions, the Chief Secretary has gone back on the commitment he made 10 minutes ago. I think all he was saying was that the Paymaster General visited the ombudsman recently and has indicated that she will publish a response to the ombudsman's report. The ombudsman has told me that she hopes to receive that response shortly. When the Paymaster General winds up the debate, will she confirm that that is the situation and, following the questions from Labour Back Benchers, may we have a clear statement about which of the ombudsman's recommendations have been accepted? The Government do not seem to have clearly accepted recommendations 2, 6, 10 and 11, yet they are the most important ones, so I hope the Paymaster General will make the situation clear.
	I want to focus on the administrative problems in the tax credit system first and then to make some more general comments in my conclusion. I began by expressing frustration that Ministers are taking so long to resolve the problem. There is frustration not just among Opposition Members but among groups, such as the citizens advice bureaux, which have a deep commitment to tackling child poverty and poverty in the working population. Before the debate, Citizens Advice published a briefing note, which is a good and powerful critique of the existing problems in the tax credit system. I am sorry that the Chief Secretary has not seen it. I shall certainly make sure that he does so after the debate. I shall read from the beginning of the document, which states:
	"To date . . . we have not seen clear evidence"—
	from the Government—
	"of an action plan that will deliver the changes we believe are needed".
	Citizens Advice picks out three points, and if the Paymaster General can give us any enlightenment about those it would be most welcome. Citizens Advice states:
	"There has been no commitment to place an absolute limit on the amount that can be recovered from families who have been overpaid."
	We need clarification about that. Citizens Advice continues:
	"The position regarding writing off overpayments remains confused"—
	which has certainly been confirmed by the exchanges in our debate today—
	"as the onus remains on individual families to challenge the decision to recover, leaving unknown numbers of people repaying overpaid tax credits which may have resulted from Revenue errors."
	That was a problem that the ombudsman thought might mean that the recovery mechanisms were in breach of the law. She made it clear that at the very least she considered that it constituted maladministration, which alone is a serious enough assertion.
	The final point about which Citizens Advice was unhappy was this:
	"No commitment has been given to introduce a statutory right of appeal to an independent tribunal."
	I think we heard confirmation in the exchanges between the Chief Secretary and the shadow Chancellor that the Government would not accept that particular recommendation, but given the uncertainty over the ombudsman's other recommendations, I shall not be surprised if the Paymaster General tells us that she has not actually reached a settled decision on any of the issues and that she intends to publish a letter responding to the ombudsman's report at some unknown stage over the next few weeks. However, if we could have some clarification I should be grateful—[Interruption.] As the hon. Member for Buckingham (John Bercow) indicates, I am always willing to give way at any moment on such points.
	I said earlier that these issues are important to Members on both sides of the House and, in the debate in Westminster Hall on 7 June, we heard contributions not only from Opposition Members but from the hon. Members for Nottingham, North (Mr. Allen), for Stroud (Mr. Drew), for Selby (Mr. Grogan), for North Durham (Mr. Jones) and for South Derbyshire (Mr. Todd), all of whom were concerned about the impact on their constituents of the problems with the tax credit system. Several of them said that they wanted to see not only administrative changes but fundamental change to the tax credit system of the type that the shadow Chancellor mentioned at the end of his speech.

Frank Field: The hon. Gentleman mentioned the Australian experience. The Australians not only had a disregard system, but also realised that once they were in a hole it was best to stop digging, so they wrote off the overpayments up to 1,000 Australian dollars.

David Laws: The right hon. Gentleman is exactly right and has for may years taken a very close interest in the development of tax credits. He draws attention to the problems in Australia that led to an ombudsman's report there two years ago in which the ombudsman criticised the Australian tax credits system, saying that the system inherently led to a large number of debts, that the debts arising from the scheme were affecting lower-income families, that the debts could be unavoidable and that they seemed to have an unfair retrospective effect. He was also concerned about the manner in which the debts were being recovered. We now find that all those issues are confronting us in the United Kingdom. The Government must have been aware of all those issues when they devised their policy, but they have failed to address all of them with the relatively minor changes to their own policy, such as the disregard.
	We have talked about the complications of the system and people's bafflement at trying to understand their awards and entitlements. Thanks to the parliamentary questions that the Treasury has answered—which is unusual on the subject of tax credits—we now know that 65.5 million award notices have been sent out in just two and a quarter years, including 34 million award notices last year alone. All hon. Members will be familiar with the experience of constituents coming to advice centres to describe their problems and reaching into their bags to bring out sheaves of tax credit payment papers. On Saturday, I saw a constituent who had nine separate award notices that had been issued in seven weeks, all with entirely different amounts. That is part of the problem with the system, and it has helped to cause the confusion among individuals who must then anticipate whether or not their award is correct.
	As the shadow Chancellor indicated, there has been a big rise in administrative costs. Four hundred staff have been allocated to handle complaints, and 3,200 staff are dealing with the dedicated helplines. There have been 21,600 compensation payments for bad service in the past year alone. The error rate in the system is 21.4 per cent. for the first year that we know of, as against a target of 10 per cent. and an error rate of 10 to 14 per cent. under the old system. Sir Nicholas Montagu, the then head of the Inland Revenue, told the Public Accounts Committee that he was confident that the error rate would be halved from that under the old system. What has happened instead is that it has doubled.
	While the Paymaster General seeks to sort out the problems with overpayments, 271,000 people have requested write-offs of overpayments—217,000 in 2004–05—and there have been 54,000 appeals in the first two months of this year alone. It is no wonder the tax credit administrators are struggling given that they must now make 271,000 separate judgments without any proper, statutory system of independent appeal. Although the Government's line on this seems to change from day to day, we have also been told that, so far, only £37 million of the £1.9 billion in overpayments has been written off, but the Treasury cannot tell us how much of the total overpayment has been recovered.

David Laws: My hon. Friend is right. Having seen probably 250 cases of tax credit overpayments in my constituency, I can vouch for the fact that a difficult judgment has to be made in a huge number of cases on whether the individual concerned could have reasonably known that an overpayment was being made. I would not want those decisions to rest solely with Inland Revenue staff with no rights of appeal.
	The most important thing for the Government to deal with in responding to the ombudsman's report is the second point in the recommendations on page 8. The Chief Secretary told us that the Government were going to accept it, but appeared to make a U-turn on that shortly afterwards. The recommendation concerns whether the additional mechanism for recovering overpayments is lawful and, even if it is, whether it constitutes maladministration.
	The QC who has advised the Child Poverty Action Group on this issue has made it clear that he considers the existing practice unlawful. He takes that view for a number of reasons, but particularly because no assessment is made before recovery is begun of whether recovery should go ahead under the code of practice. In other words, the Government recover first and ask questions later. The Paymaster General has written to me on this point to seek to clarify the Government's position. She maintains that the Government's existing position is lawful. That is not persuasive because the first argument that she advances is that the majority of overpayments are correctly repayable. On that basis, she seems to imply that all overpayments should be repayable.
	The ombudsman, in one of the overlooked but perhaps most important paragraphs of her report, 5.17, states:
	"Whatever the legal position, our view is that a fundamental unfairness arises where recovery . . . takes place to the detriment of a customer before COP 26"—
	that is code of practice 26—
	"has been considered. Effectively, the Revenue has fettered its own discretion by making an initial determination to commence recovery action, before it has considered the full facts of the case. That is maladministration."
	That is a biting criticism of the way in which the tax credit system is working. The Paymaster General has been honest enough to admit in her letter to me that
	"It is rational that we should operate a system that includes a presumption of recovery by means of reducing or stopping further payments while the investigation proceeds."
	It is recovery first and investigation later.
	The right hon. Lady attempted to tackle that point in earlier debates, including when the hon. Member for Nottingham, North (Mr. Allen) raised the issue in the debate in Westminster Hall. She was careful in the words that she used. She talked not of investigation first and then recovery but of notification before recovery. Notification and investigation are very different words and they have different effects. The effect of the Government's existing policy is that someone who has an overpayment through no fault of their own and entirely through the incompetence of the Inland Revenue will have that money reclaimed by the Government. They will then have to try to stop the reclaim. It is clear as well from the Paymaster General that the Treasury's position is not that there will be an automatic stop but that recovery can be suspended while the dispute is resolved. That there can be negotiation puts an entirely different gloss on the Government's policy. It allows the Government to recover tax credit overpayments from people who received those overpayments through no fault of their own. That is a major issue and one that the Paymaster General needs to address today and in her response to the ombudsman's report.
	There is also the issue, which was raised by the shadow Chancellor, of whether the existing system is working effectively. The Government owe it to us and to themselves to investigate, two years into a new system, whether the payment mechanisms are sensible, whether they are working effectively and whether the transfer from a system of fixed awards, which we had under the working families tax credit and family credit, should be replaced with the existing backward-looking awards that are constantly changing.
	Anybody who has read, as I am sure that the hon. Members for Normanton and for Doncaster, North (Edward Miliband) have, the Joseph Rowntree Foundation report of 2003 about the tax credit systems in Australia and Canada—Australia has the British system, while Canada has a fixed system—will know that the evidence is not clear about which is the more favourable. The report states:
	"There is no evidence of dissatisfaction with the non-responsiveness of the Canadian system."
	It continues:
	"Is a system with retrospective recollection of overpayments more or less responsive than one that pays from the start according to the previous year's income?"
	The report states that the answer to that question is not "self-evident".

Frank Field: I shall make a short contribution and, as best I can, bring some of my constituents into the debate. For the figures clearly show that large numbers of people in Birkenhead have been beneficiaries of the new tax credits system, but those who have come to the advice surgery, phoned and written to me all share one characteristic: they are all fairly poor. The question to which the Paymaster General suggested we should address ourselves today is not whether we all subscribe to the abolition of child poverty. Of course we do. The question that I pose, which the Opposition spokesman was not willing to answer, was whether we are spending £15 billion of taxpayers' money every year in the system in the most effective way to deal with child poverty.

Andrew Selous: Like every other hon. Member, I have experience of many constituents complaining to me about the problems of administration of the tax credit system. I, too, have a constituent in a similar position to that of the hon. Member for Yeovil (Mr. Laws), who has received eight awards in the past nine or so weeks.
	I shall be listening carefully to the Paymaster General to hear whether the Government will follow all the parliamentary ombudsman's recommendations. Her response will be the most important part of the debate.
	I want to look at tax credits from a slightly different point of view from those of other Members who have spoken this afternoon. I salute the Government's objective of trying to use tax credits to reduce poverty. I use the term "poverty" in general because I am not sure whether the focus on child poverty—to which tax credits are integral, so far as the Government are concerned—is necessarily healthy. In many other European countries, the focus is on family poverty, and such a focus might have something to teach us in relation to the administration of tax credits.
	The figures that the Department for Work and Pensions released on 30 March from its study of households on below-average incomes show that child poverty fell in 2003–04 by only 100,000. I say "only" because that was the year in which £2.5 billion was spent on tax credits, and all the analysts expected a much more significant fall in that year. Indeed, the figures show that, after housing costs were taken into account, child poverty remained static.
	The figures also show that there was no reduction in the number of poor children living in two-parent or couple families in 2003–04. That is significant because 57 per cent. of children living in poverty live in two-parent families. There are serious and worrying anomalies relating to children living in two-parent or couple families. They make up the biggest cohort of children living in poverty. It is the task of the Government and the Opposition—indeed, of all of us in the House—who are thinking seriously about how to reduce child poverty to ensure that, whatever system we come up with, these perverse unintended consequences are rectified. They are having damaging consequences for our country.
	I shall illustrate that point with some specific examples. In 2003–04, a couple family with two children would have needed an income of £262 a week to get out of poverty, whereas for a lone parent with two children, that figure would be only £182. Those are after-housing-costs and after-tax figures. To get the income necessary to get out of poverty, a single-earner couple in social housing paying rent of £53 a week would need to earn £336 a week, as opposed to only £86 a week after the implementation of the tax credit system. That is nearly four times as much, and it represents a very wide disparity.
	The former senior Inland Revenue officers, Don Draper and Leonard Beighton, have released figures today showing that, for the tax year 2005–06, a couple with two children in social housing on half average earnings paying a weekly rent of £53 would be left £22 below the poverty line, whereas a lone parent family with two children in those circumstances would be left £66 above it. I am delighted that that lone parent family will be £66 above the poverty line, and no part of my proposals would involve taking money from lone parents in any way. I want to make that very clear to the House. Surely, however, that situation must be of concern. Most children who live in poverty—57 per cent. of them—live in couple families, and according to the example that I have just given, they would be £22 below the poverty line. That is before any child support, which is disregarded for tax credit purposes. My concern is that the Government will not achieve their target of halving child poverty by 2010 because of some unintended, but very significant, flaws in the administration of the tax credit system.

Rob Marris: I seem to remember having the great pleasure, during the last Parliament, of serving with the hon. Gentleman on the Work and Pensions Committee. The Committee produced a report on child poverty on the information then available, and, as I recall, the whole Committee expected the Government to reach their 2010 target. Is the hon. Gentleman now saying that he does not think that that was right, or have I misremembered his signing up to that report?

Stephen Dorrell: What I will confirm to the House is that I was a supporter and member of a Government who saw huge improvements in living standards across the community and in the working of the labour market. The hon. Gentleman might prefer to see his Government reverse that but as he knows, his right hon. Friends refuse to do so because they know that the labour market changes that we introduced have delivered improving living standards across the piece. He is right that poverty as measured is a relative concept, which is why it is a more accurate definition of policy objectives, in my view, to espouse the raising of living standards across the piece, providing to every section of the community better access to opportunity to improve their living standards. The problem with the tax credit system that we are debating today is that it has not reconciled the dangers associated with excessive complexity and bureaucracy with the delivery of other public policy objectives.
	Why was I persuaded, as a fresh-faced Financial Secretary, that the system was not worth the candle? First, as has been pointed out several times previously, it is simply a fallacy to consider the benefit system and the tax system and to say that they are both to some extent means-related and that they can therefore be merged into the same system. That is the approach that the Chancellor has taken—to imagine that because the Inland Revenue in its old incarnation made an assessment of means, and because the Department for Work and Pensions made an assessment of means, we could somehow merge the two systems into a single tax and benefit system. As the right hon. Member for Birkenhead said, that view overlooks the obvious but fundamental point that the tax system is based on an annual assessment of means, whereas the benefit system, if it is to provide secure income to the benefit recipient, must be based on a much more short-term assessment of the needs of the individual.
	As for all the arguments that we have heard elucidated today about the difficulties—and moreover the injustices—associated with reclaiming overpayment of tax credits, those difficulties arise because the system now seeks to reconcile retrospectively a means-tested benefit system back into the previous tax year. That mismatch between the two systems ultimately led earlier policymakers to conclude that we should not go down that route, and still leads me to believe that the Government might ultimately have to conclude that their system must be fundamentally rewritten. I say that as someone who does not think that we should change the rules of such systems every six months, which in itself leads to further complexity and injustice.
	If Ministers really believe that one more heave will deliver a sufficient improvement in the operation of the system to address all its difficulties, they are entitled to a hearing. But as one who considered it in the past, and who has seen too many of the predictions that were then used to dissuade me from that course come true, I allow myself a certain scepticism as to whether one more heave will in truth be enough to eliminate all those difficulties.
	There is one other aspect, on which we have not touched today, that has made the system even more complex than it probably otherwise needed to be: the Chancellor's view, with which, again, I have some sympathy, that some of the combined effect of the tax system and benefit withdrawal led to sharp work disincentives as people saw their benefits being withdrawn. The background papers at the time that the tax credit system was introduced referred to the withdrawal ratio for family credit of 70 per cent.—for every £10 of extra earnings that the family secured, £7 was lost in family credit withdrawn—and the Chancellor sought to reduce that rate of tax and benefit withdrawal. There is a tension there, too, however, as whenever one tries to reduce the rate of taper, one extends further up the income scale and includes more families in precisely the problem that one seeks to control. Not only has the system been made much more complex by the merging of the tax and benefit systems, but the reach of the system has been extended further up the income scale, so that more families are affected than were affected by the previous benefit structure. If we stand back, we see that the system is inherently complex, regardless of the set of rules that we operate. We have voluntarily made it more complex by mixing an annual cycle with a much more short-term means-assessment cycle, and we have increased the number of people affected by extending it further up the income scale.
	Let us step back from the big picture. We then see that the complexities created by that system have caused real injustice, and real concern and worry, to individual citizens on low incomes, who now fill our surgeries. At this point, I ask myself whether the price paid by those people for the system that the Chancellor has willed on us is a price worth paying.
	I do not believe that the problems we see in our surgeries result from inadequate computer programming or inadequate training of clerical staff. To believe that would be to make scapegoats of people who have been given an impossible task. The real issue is that policy makers at the highest level have been presented with choices and have made the wrong call. The people paying the price for that wrong call are the people in our surgeries who are worried sick, literally in some cases, by their inability to understand how to dig themselves out of the hole into which those policy makers have put them.

Edward Miliband: It is a pleasure to follow the right hon. Member for Charnwood (Mr. Dorrell). He is of course a distinguished Member of Parliament. He was also a distinguished Treasury Minister, and was, I believe, one of the Ministers in the last Government who did care about poverty issues. I therefore think that we should take what he says seriously. It is also a pleasure to speak in the same debate as my right hon. Friend the Member for Birkenhead (Mr. Field), who, as we all know, has a very distinguished record on tackling poverty both in the House and outside.
	It would have been good if the start of the debate had featured a recognition by both sides of the context in which we are discussing tax credit administration: a context in which, under the Government of whom the right hon. Member for Charnwood was a part, child poverty increased from about 1 million to 4 million. I know that the right hon. Gentleman cared about child poverty, but it increased none the less, by 3 million. Many people were in dire need, and nothing was done. Since 1997 child poverty has fallen, by about 1 million. That is not a bad record: child poverty has fallen, after trebling under the last Government.
	Of course it is right to acknowledge that there are problems in the system, and my right hon. Friend the Paymaster General has acknowledged that. I think that we need to ask five questions. Does the system tackle poverty? Does it encourage people to work? Is it properly taken up? Is it well targeted? Does it take the stigma away from claimants? I believe that those questions are relevant to a discussion of poverty and the means of tackling it.
	I have already drawn attention to the impact of working families tax credit and its successors on the tackling of poverty. I am now speaking for the people who have had bad experiences with the tax credit system, but also for the people receiving tax credits—8,000 in my constituency—many of whom told me during the general election campaign that tax credits had had a huge and positive effect on their lives. If other Members are honest, they will say that their constituencies also contain such people. It would obviously be wrong to deny that there are people who face problems, but it would be equally wrong to deny that the lives of many others have been transformed by tax credits. Members need not take my word for it; they need only read the ombudsman's report. She herself said that the undertaking had been "broadly successful", and—this is on page 56—
	"for the majority of the Revenue's six million or so tax credits customers, the system appears to have worked well."

Andrew Selous: May I tempt the hon. Gentleman to add a sixth question to the five that he quite properly raised earlier? It is the question that I posed in my own speech. Is it right to operate a system that constitutes a huge financial disincentive for people who want to live together? They are penalised significantly if they do so, week by week.

Edward Miliband: Time will tell, but I am still convinced that a responsive system is better, and I shall explain why shortly.
	My third question concerned take-up. I am surprised that so few Members mentioned it. Take-up of family credit in the first year was 57 per cent.; take-up in the first year of this system was 80 per cent., which is pretty good going for a means-tested, income-related benefit. My right hon. Friend the Member for Birkenhead would know better than I, but I should have thought that it was unprecedented. Six million families and 10 million children have been helped.
	One reason for that is the fact that the system is non-stigmatising: it is part of the overall tax system. There is a significant prize to be gained from not having a system aimed at the poor, providing an income top-up for the bottom third of the population or even fewer people. Under such a system, even those who are working must go to the social security office if they are to have a living income.
	My fourth question was "Is the system well targeted?" Members have mentioned how high up the income scale the tax credit system goes. In fact, 40 per cent. of the benefit goes to the bottom 20 per cent. of families, so it is a reasonably well-targeted system. The shadow Chancellor referred to people on £66,000 a year, but the people at the very top do not get very much money out of the system—if they bother to apply. They get the equivalent of the old children's tax credit, which is a maximum of £10 a week. The system is about lower and middle-income families. It is true that it is not for the small minority—I am rather in favour of the fact that these credits go to a larger proportion of the population—but no one can deny that this is a well-targeted system.
	My fifth question is: is the system de-stigmatising? For many years, we have had all kinds of social security benefits, but huge stigma has attached to them. We sometimes witness the same problem with the pension credit, which is in fact a social security benefit. Some elderly people say, "I'm not sure about claiming it because I do not want to have to claim benefits." People do not say the same about tax credits, so in that regard we have made a huge advance. In fact, in some ways it is a revolution. We have removed the division between the deserving and the undeserving poor: we have changed a system that required "deserving" taxpayers to pay for "undeserving" benefit recipients. In fact, doing so was the motivation behind the scrutiny of the system that took place in the 1970s.
	I am surprised that this achievement has not been more greatly acknowledged during this debate. I do not want to live in a country in which people feel guilty about claiming a top-up for working. We could have introduced the minimum wage at the level to which tax credits raise people's income, but as Conservative Members would doubtless have pointed out, doing so would destroy jobs. Indeed, I find myself in a slightly ironic position. I nipped out earlier to have the pleasure of being involved in my first statutory instrument debate, which was on the national minimum wage. What did I hear in the Committee Room Upstairs? I heard great plaudits for the national minimum wage and for tax credits; indeed, there was a progressive consensus throughout the Committee on the role of both. However, I returned to this Chamber to hear diatribes from the Opposition against tax credits.
	The tax credit system answers my five questions and works well. There are significant administrative and other problems, and we should of course apologise—as the Paymaster General has—for the hurt and distress that has been caused. But one thing struck me on listening to the shadow Chancellor's contribution. We heard from him a 26-minute diatribe against the tax credit system, and about all manner of cases, for which we have sympathy. At the end, we heard the clarion call not to abolish tax credits, but for a far-reaching review. I, too, am in favour of reviewing the system's working, but there is a very good reason why the shadow Chancellor did not commit to abolishing tax credits at the next election, which he could easily have done, given his diatribe against them. He knows that, fundamentally, the system is popular with the majority of recipients—the majority of recipients in my constituency, for example. That is why he has not committed to abolishing it.
	The Government have a responsibility to sort out the problems in the system, but we should all acknowledge the advances that have been made under it. Let us have a rational debate about the way in which it works, but let us please do so in the proper context. This Government have made work pay and tackled poverty—something that was never achieved in 18 years of the previous Conservative Government.

Peter Bone: I thank you, Mr. Deputy Speaker, for calling me to speak on an issue with which every Member of this House is doubtless only too familiar. I went to the House of Commons Library to research the tax credits system, and the librarian was most helpful. She tapped into her computer the phrase "tax credits", and the printer started to produce page after page. Suddenly, she screamed, "But it's all gobbledegook!" I have those 25 pages of complete gobbledegook in my hand. Perhaps the explanation is that there was a glitch in the Library's computer system. However, as a new Member I have been told that everything produced by the House of Commons Library is always accurate, so I suspect that the librarian's initial view—that the tax credit system is "all gobbledegook"—might be right. There is one thing, however, of which I am absolutely certain: many of my constituents believe the tax credit system to be complete gobbledegook.
	The tax credit system is so confusing and complicated that no one seems to know what they are entitled to. The 2000 Budget stated that an integrated child tax credit would
	"improve the transparency and administration of income-related payments through the tax and benefit system."
	Has transparency and administration improved? It seems to me that the current system, which largely revolves around the highly fluid concept of what is "reasonable", has achieved the exact opposite. Let us consider the forms that claimants must fill in to apply for tax credits. As a chartered accountant, I am not ashamed to say that I find them confusing. I am professionally trained—how on earth is the average person, who relies on the extra income that tax credits generate, meant to understand them? Tax credits are meant to help the most vulnerable in our society. They are meant to encourage people to come off welfare and to go back to work. They are meant to make life just that bit more comfortable for those on low or moderate incomes, yet these are the very people whom the system is penalising by being inefficient, bewildering and incompetent.
	I am very grateful to be able to speak about an issue that affects so many of my constituents in Wellingborough and Rushden. I am sure that I am not alone in finding that a good majority of the constituency postbag consists of letters from constituents who need help with, and clarification of, their tax credit payments. Indeed, half those who ask for help at my weekly surgeries ask about this very issue. I was interested to read the Paymaster General's own statistics. According to them, between April and December 2004, the Tax Credit Office, Treasury Ministers and members of the Board of Inland Revenue received almost 6,000 letters from MPs who were trying to sort out the many problems that their constituents were experiencing—

Peter Bone: I will treat that with the contempt it deserves; no such boast was ever made.
	Constituents have problems with tax credit payments, with overpayments, with lack of payments and with no payments at all. In the tax year from April 2003 to March 2004, the Tax Credit Office hotline for MPs took more than 19,000 calls. That is 19,000 calls from MPs alone, who have had to get involved because their constituents have hit a brick wall and cannot get any further by themselves. Thanks to the system's incompetence, this problem is widespread and affects vulnerable families right across the country, so it is no surprise to learn that the two latest reports on tax credits were less than complimentary about this fundamentally flawed system.
	Given the tax credit system's very nature, it will always fail the most vulnerable in our society. Because it has so many different elements, it can only confuse and confound those who claim tax credits. Claimants have to estimate their income for the following year, which in itself gives rise to massive complications. But the real problems come when a claimant's circumstances change. Claimants are asked to notify the Tax Credit Office of certain changes within three months, though for other changes notification can wait until the end of the financial year. However, like many elements of this baffling system, precisely what changes need to be declared and when is just not clear.
	Many of my constituents who contact me for help have told me that, to be on the safe side, they inform the Tax Credit Office of all changes. One would think that that was very sensible of them, but it is here that the problem starts for thousands of families who are being penalised by the system. Much of my tax credit case work is taken up by constituents who have had their tax credits stopped completely due to overpayments in previous months. In some cases, the Tax Credit Office states that the overpayments will not be recovered as it was an error by that office in the first place. Why, then, did it stop the tax credits completely and why are those credits continuing to be stopped? In almost all the cases that I have dealt with, the claimant informed the Tax Credit Office of changes to their circumstances. In many cases, that office failed to update its records either through computer error or inefficiency, yet it is my constituents, along with many others, that suffer. In fact, according to the latest reports, nearly 2 million families have suffered.
	How is a family meant to plan for the future—financially or otherwise—if they never know exactly what is going into the bank account each month? The rules and regulations of tax credits state that people do not need to pay back an overpayment if they reasonably believed that it was a correct statement of what they should have received. However, what is "reasonable"? It is another open-ended, fluid and confusing term, which means all things to all men and penalises the very people that the system is supposed to help. Families often do not know their financial situation from one day to the next and while the correct procedures are not being followed to update the tax credits computer system when changes occur, those families will continue to live in financial limbo.
	As for the cost of bureaucracy and waste, the Government, as usual, do not disappoint. The sheer volume of forms, the fact that payments are made through PAYE rather than directly to the claimant and the vulnerability of the system to massive fraud are all costing the taxpayer dearly—about £400 million a year and with nearly 7,500 people working the system.
	I would like to finish by giving just one example of how the tax credit system has failed those who need it most. A constituent came to me in desperate need for help—her case comes to the crux of why the system is failing. She was about to be evicted from her council house for being severely behind in her rent and for being unable to keep up her payments on her council tax. It all started when she had to leave work due to illness. She was incorrectly paid working tax credit instead of incapacity benefit. Of course, it turned out that she was being overpaid tax credits and the Revenue asked her to pay the money back. Not only was she not in a financial position to do so, but she was also penalised by the council for receiving tax credits, which counted against her housing and council tax benefit.
	After several attempts to contact the Tax Credit Office to advise it that her tax credits must cease, she was still receiving the tax credit payments 14 weeks later. Because she was receiving no other benefits due to the overpayment, that is all that she and her children had to live on. When she rang that office again, she was told that her case was stuck in processing and that she would just have to wait her turn. Unfortunately, hers is not a unique case, but it is wholly unacceptable. The current tax credit system is, by its very nature, inefficient and fundamentally flawed and it penalises the most vulnerable of our society. Two million families have suffered under that system, which relies on staff regularly updating claimants' information and a computer system that properly processes the correct data. At the moment, we have neither. How long will it be before the Government realise that micro-management and bureaucracy do nothing but penalise the most vulnerable people in our society?

Richard Spring: Looking back on the debate, one realises that this really is a case of the road to hell being paved with good intentions. Back in 1998, when Martin Taylor submitted his report "Work Incentives" after observing the taxation and benefit system, he said:
	"there is no reason why both systems should not contribute to the same objectives, providing the means to improve work incentives and relieve poverty."
	The difficulty in reality is that IT systems are never easy. The truth is that the Government's record on them does not inspire confidence. The Child Support Agency's computer system, which cost nearly £500 million, failed, leading to the resignation of the chief executive. Staff at the Department for Work and Pensions were unable to process new benefits and pension claims for several days because the system went down. The computer systems of the Passport Service, the Criminal Records Bureau and National Air Traffic Services have also had problems. And so we go on.
	In November, the National Audit Office, commenting critically on IT problems, cited inter alia a lack of clear senior management and ministerial ownership and leadership. That has certainly been the case in this instance. The Paymaster General told the House on 7 February:
	"The IT support for New Tax Credits is a major new system. The system has been stable and performing very well in terms of availability and speed for well over a year."—[Official Report, 7 February 2005; Vol. 430, c. 1245W.]
	That is in contrast to what Steve Lamey, the chief information officer at Her Majesty's Revenue and Customs, said:
	"If I were an information technology historian, I would simply love it."
	With the introduction of this hugely complex system, warning bells should have been sounded a little earlier, before the problems we continue to hear about emerged.
	We hear that, of the Inland Revenue's 90 million letters sent out each year, 35 per cent. are returned and 31 million are wrongly addressed and 29 per cent. of PAYE codings are incorrect. The mood music is clear. Even the Labour thinkers Anthony Giddens and Patrick Diamond have spoken about a "complicated means testing infrastructure" in respect of tax credits.
	I would point out to the Paymaster General that the years between 1999 and 2003 saw enormous changes in the benefits system. At one point, we had the introduction of the working families tax credit, the disabled person's tax credit and the child care tax credit—and later we had the abolition of the working families tax credit, the disabled person's tax credit, the children's tax credit, the baby tax credit and the employment credit. The former shadow Secretary of State for Work and Pensions, my hon. Friend the Member for Havant (Mr. Willetts) observed:
	"So, since October 1999, the Government will have introduced five new tax credits for families, scrapped four of them and then introduced two new ones. That averages out at a new tax credit for families every six months."
	Where has all that landed us? As a press release relating to a Citizens Advice service report graphically expressed it:
	"In the most extreme cases, CAB clients have been threatened with repossession or eviction. Some have had to give up work because they are unable to pay for child care. CAB advisers have had to arrange Salvation Army food parcels for families left without enough money to eat. Tax credits staff have even told some families they must take out high-cost loans to repay overpayments . . . CAB advisers have found it impossible to resolve even simple problems, because tax credit IT systems have left helpline advisers unable to provide accurate information, and because letters have gone unanswered, sometimes for moths."
	What we have seen is simply grotesque—incidents of hardship, anxiety and bureaucratic incompetence on an unprecedented scale. It is ludicrous to describe the reality using terms such as "stable" and "performing well". We know that the Government are trying to recoup £1.9 billion for 2003–04, and that they will not pursue a further £800 million from recipients who fall within the 2005 disregard.
	How will that be dealt with in the Government accounts? That is an interesting question, and I have discovered the answer. The Public Accounts Committee reported:
	"If the Department for Work and Pensions paid out benefits corresponding to tax credits in the traditional way, they would have to seek Parliamentary approval for over-payments of £500 to £700 million a year. As these tax credit overpayments are netted off against tax collected within the Inland Revenue's accounts they are not subject to the same reporting and accountability to Parliament as voted funds."
	So for these massive sums of money, full parliamentary reporting and scrutiny are not available. More light should have been shed on this very murky issue.
	I am very disappointed that the Chief Secretary is not present to hear the end of the debate. I do not know where he is: he is always very courteous in the House, but it was extraordinary that, like the Chancellor of the Exchequer, he has failed to offer any apology for the grotesque misfortune that has befallen many thousands of the most vulnerable people in the country. The right hon. Gentleman gave a bloodless and technocratic performance.
	The Chief Secretary was very unclear about the statutory test for the recovery of excess payments, which he rejected. To answer his challenge, I can say that the Opposition accept the global amount for the provisions of tax credits, but we need clear answers to many questions. The Chief Secretary did not give them, and I hope that the Paymaster General will take this opportunity to do so.
	The hon. Member for Yeovil (Mr. Laws) said that Ministers were taking a long time to resolve the tax credit problem. He rightly noted that no real action plan exists, and mentioned the exhortations from Citizens Advice. He also talked about error rates and the amount of bureaucracy, and I agree with him that we need very clear answers from the Paymaster General on these matters.

Richard Spring: My hon. Friend the Member for Tatton made the position very clear. Given the huge bureaucracy and costs of the tax credit system, and the huge suffering that it has caused, we need a full-blown review of its operation. All hon. Members should be committed to that, and I refer the hon. Gentleman to the ombudsman's report in that respect.
	The right hon. Member for Birkenhead (Mr. Field) was right to say that the question is not whether we dislike child poverty or want to deal with it, but how we resolve it. Of course, we are all committed to abolishing child poverty, and the right hon. Gentleman listed three clear reforms that need to be introduced. He asked that the Paymaster General respond to his suggestions, and I hope she will.
	My hon. Friend the Member for South-West Bedfordshire (Andrew Selous) made a very well informed speech. He said that the operation of the system contained imbalances that discriminate against families, and that there was insufficient recognition of that. That is an important point, and it could be part of a review of the whole system.
	It is always refreshing to hear from my right hon. Friend the Member for Charnwood (Mr. Dorrell), who has considerable ministerial experience, and who rightly said that the Chancellor and those closest to him underestimated enormously the policy difficulties involved in a change of this sort, with all the attendant consequences. He asked whether the price was worth paying.
	The hon. Member for Doncaster, North (Edward Miliband) posed five questions. He rightly said that any system that imposes a stigma on people is unacceptable. His questions were listened to with respect, but he must appreciate that the system is failing in a monumental way. It is the responsibility of the Opposition and other hon. Members to hold the Government to account. We have to find a way forward. Although the hon. Gentleman cited the system's objectives, I do not believe that he can be remotely satisfied with the way it is working out in practice.
	My hon. Friend the Member for Wellingborough (Mr. Bone) made an excellent and very practical speech, in which he spoke about the problems that people brought to his surgery. He brought a sense of reality to the debate, and set out the terrible fact that families in this country have no idea what their income is going to be.
	The parliamentary ombudsman has criticised the application of the system, the customer interface and the IT equipment. The Government must take that on board, but they must also recognise that they have been caught between creating chaos and misery on the one hand, and spending vast sums of taxpayers' money on the other.
	I can only echo what was said by my hon. Friend the Member for Tatton, and many others. There has to be a proper and comprehensive review of the system, to bring order to the problem and to ensure that it never happens again on any comparable scale. It is reported that the head of the HMRC has said that it would cost £5 billion to revamp the system, and we know that the running costs now total more than £400 million.
	The Atkinson review of Government bureaucracy said that the Government were inefficient and that a different system was needed, but no fewer than 3,200 Revenue staff are trying to underpin the tax credits helpline. The Treasury spin machine told The Times this morning that that was due to a massive increase in take-up. That is utterly wrong: it is due to the massive chaos of the system.
	The Chancellor of the Exchequer is the father of tax credits. He is attending a meeting of ECOFIN, and perhaps he will talk about waste in the EU and about our £3.6 billion rebate. Perhaps he will speak about the lack of transparency in the EU, and about the need to fight oppressive regulation and bureaucracy. However, what would the right hon. Gentleman's credibility be if his fellow Finance Ministers knew that the most recent tax credit overpayments totalled about three quarters of the very rebate he is supposedly so determined to secure? One simply could not write the script.
	Finally, whatever criticism one may make of the Paymaster General, she is the one who has defended the tax credits nightmare, both in this Chamber and in Westminster Hall. She has acknowledged the hardships that it has caused, and even the Prime Minister has apologised, but we have yet to hear a word of remorse from the person with departmental oversight of this bureaucratic nightmare. I leave it to the House to make a judgment on that.

Dawn Primarolo: In the few moments left for my reply to this important debate I want to try to touch on all the major points that Members have raised. I start by making clear that the debate must be set in context. As the Minister, I fully acknowledge the problems with the introduction of the tax credit system and the IT system. I have been open with the House about the problems caused for some claimants and I would never wish anybody to suggest that I underestimate them. I have listened carefully to the points that have been made about the recommendations by the ombudsman, the adjudicator and the CAB and I shall return to them. I shall explain to the House how I propose to take forward those recommendations.
	Like my hon. Friend the Member for Doncaster, North (Edward Miliband), I want to start by setting the context. I was interested in what the right hon. Member for Charnwood (Mr. Dorrell) said and, if I may, I will paraphrase him. He said that the Conservatives were very concerned about poverty, but they had been unable to do anything about it and it continued remorselessly to rise under their Administration. When people talk about the misery of poverty, they should consider that context: the rise from 1 million to 4 million in the number of children who fell into poverty under his Government.
	The tax credit system assists and supports the poor. It is important to reinforce that point. As my hon. Friend the Member for Doncaster, North suggested, it is a broad-based system. He referred to take-up, and said that tax credits were well targeted and that the system destigmatised claimants and ensured that most families received support. More than 500,000 children have been lifted out of poverty since 1998–99, and 6.1 million families, with 10 million children—not an insignificant number—are benefiting from tax credits. By October 2005, in real terms, families with children in the poorest fifth of the population will, on average, be £3,200 a year better off. Children's risk of poverty has fallen from 33 to 28 per cent., after housing costs, between 1988–89 and 2003–04. Of course, more needs to be done, as the Government's child poverty strategy and the review published last summer clearly indicated. We need to develop that work.
	Members have referred specifically to the administration of the system. My right hon. Friend the Member for Birkenhead (Mr. Field) focused on how the system could be made to work and to respond, in particular, to the needs of the more vulnerable. I understand entirely that he wants a wider debate about whether tax credits really are the way forward. He will understand that as a Minister, I am committed to tax credits but those are perfectly legitimate questions and they need to be asked.
	So, what have I done? On 5 July, I met Citizens Advice and the ombudsman, and today I met the adjudicator. I discussed with all of them their recommendations. I have agreed that there should be a formal response to the ombudsman's recommendations, giving a time frame for their delivery where possible. Most important, I was keen to learn from the experience of all three and to discuss with them how we could maintain contact and ensure that the recommendations are properly taken forward, how we can report back to them and how they can assist us in that process. All three organisations acknowledged the value of the tax credit system, but noted the need to deal with the issues that have been raised.
	With regard to the recommendations made by Citizens Advice, the ombudsman and the adjudicator, recommendation 10 in the ombudsman's report is that there should be a blanket amnesty on overpayments. As I have explained to the House and explained again to those organisations, the Government have a responsibility to balance our duty of care for all claimants with our duty to all taxpayers with regard to the public purse, so we cannot make a blanket decision for all cases where overpayment is vastly out of proportion to the award, and in many cases is not contested. However, we have said that, with that exception, we want to engage with them and to consider all their recommendations and the practicalities of taking them forward. For example, all three organisations made recommendations about award notices. We have been consulting them about the introduction of a new award notice. I have asked that the ombudsman and the adjudicator consider that in the light of the points they made. A draft is available, and I shall be delighted to put it in the Library.
	I can assure the House that I shall work closely with the consultation group, the voluntary sector, the ombudsman and the adjudicator to take that work forward. Many elements in my statement to the House of 26 May preceded the reports, but encompassed many, indeed all of the points, with the exception of the amnesty. That relates to the point made in a slightly different fashion by my right hon. Friend the Member for Birkenhead about the possibilities of what I would describe as playback, whereby the tax credit claimant would receive a playback of all the awards and the changes that had been made through the year, so that they had a clear statement. I have asked that that be taken forward as a matter of urgency.
	The system works for the majority of people, but at every point I try to draw on all the expertise and knowledge of those three organisations and others to improve it, and to deal specifically with the steps that we may need to take for an important group in the tax credit population. For example, I have asked the CAB to engage in discussions with us about how we can develop and enhance its advocacy role, using its expertise especially to reinforce support and advice. I have asked HMRC, in the period of merger, to examine how we can strengthen and ensure access for that particular group in many different ways.

Angela Smith: The Tories have flip-flopped constantly on the Act. They cannot decide whether they want it to be more regulatory, or deregulatory. Perhaps the right hon. Lady will clarify their position.

Theresa May: No. I want to make progress.
	That is the reality of what is happening as a result of the Act. When the Minister says that it will not affect community groups, perhaps he has not heard of organisations like Sonning working men's club or the Italian Circle in Welwyn Garden City. The committee of the Italian Circle has written to us. It was established a few years ago to provide talks about Italian subjects to members and visitors. It has slide shows, videos and so forth, and offers members and visitors the opportunity to have a glass of wine. The consumption of wine averages four to five bottles a meeting, yet it has been informed that it has to make an application under the Act for temporary event notices. According to the chairman, however, the way in which the Act is drafted has presented it
	"with severe problems, which may result in the closure of the Circle."
	The Government have failed to grasp the way in which this ill-thought-out and heavy-handed law is impacting not just on community groups, village halls and working men's clubs, but on small businesses. I have a letter from Wines Unlimited in Worcester Park, which says:
	"We are a small wholesale wine business, selling by the case, which my husband set up when he retired as a hobby. Under the old regulation we did not need a licence to trade as a wholesaler. Under the new regulation we have to have a premises licence for our storeroom, a Personal licence, pay Band D Charges council tax and many more regulations, which of course all cost money. Our profit margin is very small and therefore would not stand this kind of expense. So we can only go out of business."
	It goes on to say:
	"The Legislation has not been thought through properly. We have to spend between £100.00 and £300.00 on a course to teach us NOT about wine or how to serve the community"
	but
	"to teach us how to throw someone out of a bar! (which we do not have and have no intention of having)".
	That is how ill thought-out this particular piece of legislation is.
	At Prime Minister's questions three weeks ago, the Prime Minister, on the issue of village halls, gave an undertaking. He said:
	"I do understand the hon. Gentleman's concerns. We tried to introduce a licensing regime that puts more power in the hands of local people. I understand the problems of village halls—I have heard about them myself—and we look further into them to see if anything can be done. Obviously, in the end, we need a licensing regime that pays its way."—[Official Report, 22 June 2005; Vol. 435, c. 798.]
	Perhaps the Minister can tell us what can be done or what he intends to do as a result of the Prime Minister's commitment to the House that this matter would be looked into. What will the Minister be doing for Richard Slater of the Village Halls Advisory Service, who says that the new Act seems very unfair. He adds:
	"For halls to be limited to 12 temporary event notices means that small money-raising activities for, say, a playgroup holding a cheese and wine event will either be driven to private houses for a few or penalise an essential facility in a village."
	That is the problem. Community activities will cease as a result of what the Government have been doing.
	There are further complications. I have seen a letter from Mr. Barclay, the honorary treasurer of Roydon village hall.

Theresa May: I suggest that the hon. Lady thinks seriously before making such an intervention. When have there been problems of social disorder in village halls as a result of cheese-and-wine fundraising events for play groups? There have not been any. The Government have used an Act that introduced various other facilities as a sledgehammer to crack a nut in relation to village halls and sports clubs.
	There are other complications. The honorary treasurer of Roydon village hall has said that before it can have a designated premises supervisor it must undergo a Criminal Records Bureau check. He added:
	"We have been informed that this check cannot be carried out in England because the organisation to process these checks has not been put in place, and the current information supplied by the English Criminal Records Bureau does not meet the requirements of the new legislation. Therefore the application has to be processed in Scotland. We have four members on the Committee, who have undergone enhanced CRB checks in England, but this check is insufficient for the new regime, and they will need to undergo these checks again if they would wish to be designated premises supervisors."
	I have merely touched the surface in my remarks about what is a bad piece of legislation. Sadly, there is little time left for us to make it better. If the Minister had decided to work with us when we first raised these issues, he would have extended the deadlines, and we would have given him our support. However, we are now faced with just a few working days in the House, and no chance of bringing forward primary legislation to extend the 6 August deadline. Will the Minister at the very least now accept the mess that he has created and that he now finds himself in and work with us to find a solution for the many organisations that are struggling with the implementation of the Act?
	The Minister has not yet laid the statutory instrument setting the second deadline of 24 November. Will he agree to extend that deadline, at least until after the Christmas and new year period, so that seasonal trade and the enjoyment of the public are not interrupted?
	The Minister has set up the licensing fees review panel—I repeat the questions that I put to the Minister for Sports yesterday, which he singularly failed to answer or even attempt to address in his responses—which will not report until Autumn 2006. Will he now bring forward the review, tell it to report by the November deadline this year and agree to backdate any proposed reduction in fees, particularly to sports clubs and village halls? Will he agree also to review the way in which charges are apportioned to clubs, particularly sports clubs, so that they are based on the rateable value of only the area that is serving alcohol, rather than the club premises and grounds as a whole? Will he review the preposterous issue of temporary events notices, and increase them from 12 to at least to 24, and preferably to an even higher number?
	We are discussing the implications that this bad Act will have for the licensing regime. I have not mentioned many other organisations and businesses that are affected by the legislation, such as travelling circuses. The hon. Member for Bath (Mr. Foster) mentioned carnivals. There are also farmers' markets, fast food outlets and corner shops, some of which are finding things very difficult and may go under. All of those organisations, businesses and community activities are being affected by the Act.

James Purnell: My hon. Friend is right. The idea is that if a local community and a set of licensees fail to deal with concerns about alcohol over time, there will be a charge on them. We see that as a red card, to encourage them to act before that becomes necessary. The power is available to deal with the worst problems.
	Implementing a new piece of legislation is always challenging, and it is not surprising that in a situation where there are about 190,000 licensees and where we are collapsing six regimes into one and dealing with a sector that was previously regulated by up to 50 pieces of legislation, there will be some sectors and individual licensees that suffer anomalies. We will examine those if they occur. We have worked closely with representatives of all the organisations that were cited by the right hon. Lady and other hon. Members, and we will continue to do so.
	The right hon. Lady cited the issue of applications. She carried out a helpful survey in May to see how many licensees had applied. At that stage the rate was too slow. She found that the figure was 3.5 per cent. We therefore decided to increase our awareness-raising efforts and put in place a national campaign. We placed adverts in 28 regional and trade publications. We have done several regional tours and 50 interviews. The right hon. Lady was kind enough to mention some of them.
	We are particularly grateful for the help that we received from brewers—for example, Cobra, which helped us to reach the 8,000 Indian restaurants that they supply with beer. We are also grateful to the cash and carry network, 95 per cent. of which has participated in our initiative and helped us to distribute over 200,000 leaflets to make sure that we can reach people who do not read the trade press and who do not necessarily join trade membership organisations. We can make sure that they are reached as well and that they know they need to apply.
	We do not want to minimise the work that remains to be done, but applications have started to pick up. They were at 3.5 per cent. in mid-May, 10 per cent. by mid-June, 25 per cent. last week and they are now up to 33 per cent., so steady progress is being made. We recognise that there is much further to go, but there is other encouraging news, such as the fact that the British Beer and Pub Association reported this week that about 60 per cent. of pubs have now applied. If that rate of increase in applications continues, a very significant number of those that need a licence to trade will have applied by the first deadline of 6 August.
	If licensees miss that deadline, they have not entirely missed their chance to apply. They will be able to apply as if they were a new licensee. That will potentially be a more difficult process because there would rightly be an opportunity for the local community to make representations. The key message that we should send out today is that they need to apply by 6 August and if they miss that deadline, they need to apply by 24 November.

Alistair Burt: I am puzzled. If the Minister thinks that charges being levied on village halls are too high, why does he have to refer it to anyone? Cannot he make a decision instead of asking Sir Les to look into it?

Don Foster: No, I hope they would not. The hon. Gentleman is picking up a hoary old story, but, if he wishes, I shall respond. We believe that, over time, we should move the age of majority for many events to 16. We have also made it clear that, in the current climate of binge drinking, it would be irresponsible to do what the hon. Gentleman suggests.

Don Foster: It is legal. Good. Many people will be delighted to know that we have an answer. Equally, however, many questions remain unanswered.
	In relation to the point raised by my hon. Friend the Member for Somerton and Frome (Mr. Heath) about carnivals, the Minister has said that the Government will look into his helpful suggestion. The Minister should be aware, however, that under the current legislation a float in a carnival can legally go ahead and not require a licence, but the marching band coming behind the float is likely to be in breach of the legislation, which is why carnivals, which are often hybrids of floats and marching bands, are so concerned.
	The Minister agreed to look into the issue of circuses, but we still do not have clear answers. He has also agreed to look into the issue of village and community halls, but again we do not have clear examples. In relation to temporary event notices, he says that consultation on the details has not even started, and he said interestingly today that the number of events in a particular village or community hall will be considered before such a temporary event notice will be given, which will be welcomed by the House.
	The Government have also made a Horlicks in their failure to do much about the legislation once they got it through Parliament. The Minister has only recently been on his grand tour, having all his press conferences, having photographs taken and sending out leaflets. It was far, far too late. The Government must take much of the blame for the low take-up, not only because of the fee structure but because of the failure to publicise the legislation.
	Is the Minister aware of the problem in respect of theatres? We are told of a figure of 33 per cent. overall, but I have evidence that only 10 per cent. of theatres have so far applied. Will he advertise to them the need to do something? Why are so many parent-teacher associations, individual schools and others still applying in their droves to magistrates courts for licences for events that will take place after 24 November? Clearly, they have not yet been told that they need to do something differently.
	Why have local authorities, which were abiding by the guidance issued by the Department, only recently started to be slightly more flexible about whether they can accept application forms in the wrong colour ink? Many application forms have been rejected because they are in the wrong red ink. At long last, the Department has said that local authorities should forget the guidance that it issued, and that it was perhaps a bit over-the-top. [Interruption.] That is true, and the Minister should be aware of it.
	All that is not surprising, because everything was done so late in the day. The fee regulations were published on 20 January this year, only two weeks before the first appointed day, 7 February. Interestingly, as Members will know, the House did not get round to debating the fee regulations until 23 February, long after the first appointed day, which incidentally is in clear breach of the parliamentary 21-day protocol.
	Delay in respect of the pub use class orders also raises issues. We were told that pubs were going to be made a single class order. A press release issued on behalf of the then Minister for Housing and Planning on 27 November 2003, was entitled, "Hill calls time on high street blight". But when was legislation brought before the House? As we know, the Government acted 14 months later, on 21 January 2005, and yet there is clear evidence that in the intervening period there was a huge upsurge in the number of pubs and clubs on our high streets, the competition between which drove down the price of drinks and led to the development of the happy-hour culture.
	I genuinely believe, and I say to the Minister, that there is no evidence to suggest that the Act will help deal with binge drinking. It is clear that it is extremely uncertain that it will. It would therefore be sensible to delay implementation. The Government could and should be doing a number of things, such as providing for better labelling of alcoholic drinks, more funds for treatment of alcohol abuse and improved alcohol education in our schools—and what about at least giving the House some benchmark statistics to enable us to judge whether the Act, if implemented, will have led to the improvements that the Minister has claimed for it? We have seen no evidence of the Government's willingness even to consider producing agreed figures of that kind.
	We also need to know about a minimum price policy. At present there is total confusion over the ruling of the Office of Fair Trading on whether local authorities have power to set a minimum price for drinks.
	The Act was rushed through, not as a result of a desire to deal with binge drinking but to pander to the youth vote, as we know from the infamous text message
	"Cldnt give a XXXX for last orders? Vote Labour for xtra time."
	We know why the legislation was introduced. It was not introduced to address the issues of binge drinking. It was introduced in haste, without thought. Indeed, as the Minister said, the Government are still thinking about it now. It is full of problems, and is causing a great deal of difficulty to a great many people. It would be far better to concentrate on some of the other measures that could deal with binge drinking before implementing the Licensing Act.

David Clelland: So far as I am aware, this proposal has been trialled throughout Europe, and notably in Scotland, for many years. The experience is that flexible opening does lead to less binge drinking and to less trouble on the streets.
	The Act will also give local representatives more power to control licensed premises in their area in the interests of the local community, and to tailor activities and opening hours accordingly. For instance, local authorities might treat pubs and clubs on housing estates differently from those in city centres. But there is no doubt that implementation has led to some problems and I hope that the Minister will look again at how some of them might be alleviated. I do not share in the doom and gloom and cries of "Chaos!" from Opposition Members, but there are some issues that need to be addressed.
	Last week, I had the honour to be elected joint chair of the all-party group on non-profit making members' clubs. There are more than 5,000 of these private clubs throughout the country, and they are covered by the Working Men's Club and Institute Union and the Committee of Registered Clubs' Associations. Such clubs include working men's clubs, Royal British Legion clubs, RAF clubs, and Labour, Conservative and Liberal clubs. They are run for, and by, the members themselves. The members elect the committees and the committees elect the secretaries. They do not have the resources or the professional expertise of the big organisations. They are run by—dare I say it?—amateurs, although often very professionally. Some do have full-time secretaries, but they are not the professionals whom we expect to see in the big organisations.
	There is no doubt that many club secretaries have found filling in the 18-page form daunting. I agree with the right hon. Member for Maidenhead (Mrs. May)—that does not happen often—that, regardless of the number of boxes that club secretaries eventually need to tick, they still have to read the entire form to decide which need to be ticked and which do not. I spoke to one of my local club secretaries—a very intelligent man who runs an excellent club—as recently as last Saturday, and on first receiving the form, he found it daunting and put it away in a drawer. On looking at it carefully some time later, he discovered that it was not as daunting as he first thought. On the other hand, club secretaries are often elderly and not necessarily computer-literate. They have found dealing with these issues difficult, which may explain why less than 25 per cent. of clubs have returned their applications to date. Of course, the rate of return is increasing as 6 August appears on the horizon, but that in itself could cause problems as local authorities struggle to deal with an avalanche of applications. The Minister will doubtless want, as he has said, to stick to the deadline, but it is obvious that there will have to be some flexibility.
	I am afraid to say that there has also been a considerable increase in the associated costs for clubs. A £16 licence will now cost £190, and to that must be added the cost of solicitors. The right hon. Member for Maidenhead said that solicitors have a licence to print money, but they have never needed a licence—they do it without one. Architects' plans are very expensive and we should also consider the cost of advertising. Some newspapers have capitalised on the situation by doubling the cost of such advertising. Clubs are having to fork out as much as £1,000—that is not an unusual sum—to comply with the administration associated with this legislation, so this is a problem. The Minister said that the legislation will save the industry some £2 million a year, but it will not save working men's clubs and non-profit making members' clubs that sort of money. They do not make a profit, so the extra costs will have to fall on the members.
	On Monday, I asked the Minister whether he would include a representative of clubs on the licensing fees review panel, which Sir Les Elton will chair. The fee structure is a very important issue for clubs, so I hope that he will look at it and that more can be done to help clubs through that vehicle. Will he also look at the way in which local authorities are handling this matter? There is evidence to suggest that some councils and some police forces are pressurising clubs into applying for a premises licence, rather than the club premises certificate. That might make matters easier for local authorities and the police, but it will not be advantageous to clubs. They would be well advised not to take that course and to stick to the premises certificate.
	There are some advantages for clubs in the new legislation. One is that they will be able to hold up to 12 special events in which non-members can participate without having to apply each time for a special licence. That will apply to weddings, christenings, birthdays and so forth and is to be welcomed. That was the intention. However, we now find that some local authorities take the view that if "The Dog and Duck" darts team visits the local club for a game of darts, that represents one of those special events. If that happens, all the special events in most clubs will be taken up in the first month, which I am sure is not what the Minister intended. I hope that he will look further into the problem and ensure that local authorities are advised that that is not the intention behind the Act.
	In its operation, once up and running, the Act will be an improvement on the legislation that it replaces. It contains many welcome provisions and will make for a more flexible and less bureaucratic system. However, for whatever reason, it is causing initial difficulties and could lead to some smaller clubs and organisations losing their rights to trade after 24 November. I realise that that is not what Ministers want or intend and, with a little readjustment and a little rethinking, I am sure that the problems can be overcome.

Paul Beresford: My right hon. Friend the Member for Maidenhead (Mrs. May) provided us with a long list of complainants and most of the complaints also apply to my constituency. However, I want to focus on one particular aspect—village halls. The Prime Minister gave us a glimmer of hope, and the Leader of the House a faint glimmer of hope the next day, but I have to say that, in a Westminster Hall debate, the Minister brushed aside village halls in about five words. He seems to be a little more amenable this evening. I rather hope that we can secure much more rapid progress than he suggested in his opening speech.
	As I mentioned in an intervention during the Westminster Hall debate, my constituency has about 32 villages, almost all of which have halls as well as churches that also have halls. I estimate a total of about 50 such halls in my constituency.
	I cannot remember receiving so much vitriolic correspondence from so many people as I have received in connection with these halls. I would like to present to the Minister a few extracts from those letters. People from the Leigh village hall, for example, justly proclaimed that the hall was
	"a central component of village life, providing the premises in which many activities are pursued. It is managed and maintained by a group of very publicly-spirited villagers, who give considerable time and effort to ensure it is always available as a clean"
	and attractive venue. They are deeply concerned about the new regulations and the fees, which they believe are already discouraging their voluntary helpers. It is, they state,
	"the antithesis of proclaimed government intent to support and reinvigorate rural communities such as Leigh."
	Their point is that people living in rural areas who
	"give up their time, on a voluntary basis, to support their village hall"
	after returning home from work in the evenings or on Saturday and Sunday mornings
	"are alarmed at encroaching regulation, which makes it increasingly difficult to sustain their hall",
	which plays an "essential part" of village life.
	Another example is from people associated with the Beare Green village hall. I shall pick out just a few points from a very long letter. The letter explains that the hall has been sustained up to now on the basis of making a tiny profit from each event. It runs a number of events and views a good profit as £100. Presently, six event licences cost £10 in total, but under the new regime, each temporary event notice licence will cost £21, putting the total up to £126, which obliterates more than the profit from one event.
	A letter from Ripley village hall states:
	"The appointment of a Premises Supervisor will be virtually impossible due to the unreasonable burdens placed upon the position."
	Another example comes from one of my tiniest villages with a tiny hall. Thus, Holmbury St. Mary
	"would like to emphasise that for small, multi-use halls such as ours, which are run entirely by volunteers for a local rural community, this new Act is a nightmare. The paperwork is oppressive whilst the limit of only 12 functions per year at which alcohol can be present is far too small."
	Thirty is the number that they would like.
	I am aware that some of my hon. Friends want to add to my comments, so I shall be prompt. Essentially, under the new regime, people associated with my village halls feel that there is excessive bureaucracy. They have to produce plans, but they are not clear why they are required. Some have felt the need, as mentioned earlier, to consult lawyers and they are also required to produce an operating schedule—whatever that is for these tiny little halls.
	Generally, each of these little village halls is run by a small group of people who are bullied and cajoled into serving. No one wants to be the designated licence holder. All the people to whom I have spoken think it ludicrous that the temporary event notice licence has been set at one dozen, and most would like the limit to be three or four dozen. Moreover, all of them feel that the fees are far too high, especially given the minimal profit—if any—that the halls make. The House must bear it in mind that most village halls are run for the community, not for profit.
	Some positive points have been made in the debate. I hope that the Minister will take them forward, and that he will do so quickly, as village halls that do not break even will close and never open again. I am tempted to suggest that Ministers might consider setting a de minimis level for some of the very small halls. Such halls serve very small communities and are run by a very few people, and they could easily fall below the de minimis level.
	In such cases, there is clearly a need for a dramatic reduction in the fees. I hope that the Minister will consider changing the thinking behind the Act slightly and introducing the concept of personal licence holders for temporary events. Under that proposal, the person running an event would apply for a licence, at the previous level of £10. He or she would take responsibility for the event, with the result that the hall would not have to provide a person who would be personally responsible.
	Local halls are vital in rural areas such as mine. Surrey is full of such halls, and they are of enormous value. Events such as Guy Fawkes night, Christmas and new year's eve will be on us soon, and the House must remember that local halls also present film evenings, opera sessions and so on. Although he does not come from a rural area, I hope that the Minister will accept that they play a very important role. We must save our village halls but, if it is not changed, this Act will destroy them.

Adrian Bailey: I most certainly agree. Indeed my hon. Friend has just taken the next section of my speech from me.
	When I consulted my local authority, Sandwell metropolitan borough council, it was clear that it saw no problem. It has engaged in a consultation and advisory exercise with people who were affected by the legislation locally. The authority anticipates being able to meet demand for applications from would-be licensees and has said that, if it is necessary for staff to work long, extra hours to get the licences through in time, they will do so. It reflects well on the local authority and emphasises the point made by my hon. Friend. With a proactive Government and a proactive local authority, the difficulties can be overcome.
	My hon. Friend the Member for Chatham and Aylesford (Jonathan Shaw) mentioned the kebab trade association, and that is an area of concern. In Sandwell, we have 23 kebab sellers, not one of which has as yet applied for the licence. I make a public offer to the Minister—unfortunately he is not in his place, but I am sure that his colleague will convey it to him—to come to Sandwell and share a kebab at one of our magnificent local culinary establishments to promote the need to license them. I assure him of a warm welcome.

Hywel Williams: I have a long-standing interest in the subject of the debate. My constituency was one of the very last in Wales to put an end to Sunday closing, which was one of the last gasps of specifically Welsh 19th century liberalism. As we used to say in my constituency, "If you want to drink on Sunday, you will have to wait until Monday."
	I share with other Members serious concern about the hard-drinking culture that seems to be prevalent, particularly among young people. I represent a tourist area, and there are concerns about the effects of the Act on small bed-and-breakfast businesses. My particular concern, which I have taken up with the Minister before, relates to the unavailability of Welsh language application forms so close to the deadline of 6 August. This might be a small matter in the grand scheme of things but it is particularly important to my constituency and to other constituencies in Wales.
	As I have said, I have discussed the matter with the Minister previously. I had a useful meeting with him along with my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd) and others. I am glad that the Minister has moved from his initial position with reference to the non-production of Welsh language forms when he said:
	"The decision was taken that as most of the applications would be processed in English, it would be better for them to be submitted in English".— [Official Report, 13 June 2005; Vol. 434, c. 8.]
	That is decidedly not the case.
	I raised a further question with him yesterday because the situation has moved on in that Conwy county borough council in north Wales has now produced Welsh versions of the prescribed English forms. These Welsh versions are not prescribed, and I take the point that the Minister has made that it will not now be possible to prescribe Welsh language forms for another three months or so. However, the Minister has indicated that the Government are willing for local authorities in Wales to use the Conwy translation for now. That is all right as far as it goes, but some local authorities worry that a precedent might be established. If central Government have not provided the appropriate Welsh language documents, those authorities fear that they may be expected to step in. I hope that the current circumstances are unique and that no such precedent has been set.
	There are, however, further problems. Some local authorities may take the prudent view that they should not use forms that are not officially prescribed. Would they be liable if there were a dispute with an unsuccessful applicant, who could cite the fact that the Welsh forms that they used were not prescribed? More straightforwardly, who would be liable if there was a mistake in translation? Licensees might reasonably expect to use officially prescribed Welsh language forms and could be wary about using locally produced versions. Hon. Members may wonder how the situation has arisen and how the Government have got into a fix so close to the 6 August deadline. Essentially, the problems arise from a deficiency in the Welsh Language Act 1993, which provides for the publication of Welsh language schemes that provide guidance on the production of Welsh language material. It is surprising that, 12 years after the passage of the Act, the Department for Culture, Media and Sport has not prepared a Welsh language scheme. It has not been asked to do so, but I understand that it will now prepare such a scheme, which is most welcome.
	Finally, on a positive note, the Minister will be glad to hear that subsequent to our discussions, my own local authority, Gwynedd county council will adopt and adapt the Conwy forms. Those forms may be used in only a small number of cases, but I hope that they will solve the problem. The council will also take steps to publicise the availability of the Welsh language forms, and will target information at applicants who may wish to use them. I do not know whether all local authorities in Wales will take such action, but the positive steps taken by Gwynedd county council are welcome. It has pointed out, however, that Conwy county borough council has translated only five of the 100 or so forms available in English. The sooner that all prescribed forms are available in Welsh the better.
	As I said, the problem has arisen because of a weakness in the 1993 Act. DCMS was not asked to produce a Welsh language scheme, so it was not prompted to produce Welsh language forms. In Wales, that is interpreted as a reason for a further review of the Act and, indeed, as proof that it needs to be replaced. That is certainly my position, and it is the position of my party.

Malcolm Moss: The legislation seems to have been with us since the ark. It is now two years and rising, and the Under-Secretary of State is the third Minister who has been sold this hospital pass. The Minister of State should know better than to have delivered it into his hands in the condition in which it arrived.
	Flexible hours was never an issue. Twenty-four-hour drinking was never an issue, as the Minister himself continually asserts, most recently on the "You and Yours" programme only a few Fridays ago. There are real concerns, though, and there is considerable agreement on both sides of the House about what they are. They include binge drinking; the proliferation of drinking establishments in town and city centres; over-regulation; confusing, unintelligible bureaucracy; and loading unnecessary expense on sports clubs and community and village halls. Conservative Members are absolutely right to raise those matters in this debate.
	The motion is not an attack on the whole Act, only on those parts of it that are not working and unlikely to work in the time scale of implementation. We agree with the Government on the objectives—protection of children, flexible opening hours, and new powers for local authorities and the police to tackle nuisance and antisocial behaviour, which was mentioned by the hon. Member for West Bromwich, West (Mr. Bailey).
	However, five months into the application phase of the implementation of the Act, we are hearing alarming stories about the lack of applications, spiralling costs, widespread misunderstandings, and simple mistakes arising from the complexities of the system. In his parliamentary answer to me only a few days ago, the Minister estimated that approximately 47,500 applications for premises licenses and club premises certificates under the Act have been made—that represents approximately 25 per cent. of existing licensed premises and registered clubs—and said that he would expect 65 per cent. of those applications to involve variations. With variations, of course, come the possibility of objections, local hearings and appeals, and the rest of it. Surprisingly, the Minister went on to say that he had no estimate of the number of applications that will have included regulated entertainment as a licensable activity.
	The progress of the Act from July 2003 has been dogged by periods of delay and inactivity, accompanied by a refusal by all DCMS Ministers to revisit the timetable although it has been glaringly obvious that the necessary infrastructure has not been in place early enough to move forward to the next stage. It took a whole year for the Government to finalise the guidance to the Act. That guidance, which was acknowledged by both Houses of Parliament as being fundamental to an understanding of the Act, was published only on 7 July 2004, when councils were obliged to draft, consult and finalise their licensing policies. An Act of 201 clauses and guidance of 178 pages takes some understanding. Add to that the fact that at the time none of the secondary regulations had even been drafted, never mind approved, and if ever there was a recipe for confusion right from the start, that was it.
	The application in the transition phase runs to more than 245 pages, and copies of the 26-page form that my right hon. Friend the Member for Maidenhead (Mrs. May) showed to the House have to be sent to eight "responsible authorities" plus the Licensing Authority—nine in total. The number of pages is the same whether or not one wants to change the licence in any way. Thanks to the Government's refusal to grant grandfather rights for the provision of live music under the two-in-a-bar rule and the loss of bank holiday extensions, many businesses will have to fill in 18 pages of the 26-page form that relates to varying the licence. The form is complicated and the process itself is complicated. I have had letters from individuals running clubs—experienced retired business people—who say that it took them 200 hours to complete the form satisfactorily to the Licensing Authority's requirements.
	In many cases, the lack of information meant that councils could not release draft policies until September or October, thereby truncating the consultation process and time for consideration. Regulations were finally laid on 13 January to come into force on 7 February, the first appointed day. Even at that stage, the forms on the DCMS website were incorrect and did not conform to the regulations. Corrections had to be made to the forms, which were reissued on 7 February.
	It proved difficult, without the forms, the regulations for the required plans, the advertising requirements and other similar details, for businesses and councils to plan ahead. In March, several interested parties, including the Local Government Association, the Local Authorities Coordinators of Local Services, the British Beer and Pub Association, the Association of Licensed Multiple Retailers, the British Institute of Innkeeping, Business in Sport and Leisure and the Association of Chief Police Officers, wrote to the then Minister to express their concern about the lack of applications to licensing authorities.
	Several issues, which caused delays and obstructions in the system, were highlighted. They included a lack of awareness of the new law among existing licence holders, especially small independent businesses, and the late laying of regulations. Many of the problems could have been avoided by postponing the start of the application process—that is, the first appointed day. That would have given more time for everyone to get to grips with the intricacies of the process.
	The hon. Member for Bath (Mr. Foster) mentioned the due date for annual fees, which are required to be paid on the anniversary of the granting of a licence. That provides no incentive for early applications. Other problems include: the absence of a slip rule in the regulations, which would allow the correction of minor errors rather than mean the rejection of applications; the implications of alterations to licences after the first appointed day, for example, the change of licensee, and the lack of clarity around aspects of the existing law, which the new Act perpetuates. I refer especially to embedded rights and restrictions about which the DCMS and the Local Government Association cannot agree even at this late hour.
	Several hon. Members mentioned village halls, including my hon. Friends the Members for Mole Valley (Sir Paul Beresford) and for North-East Bedfordshire (Alistair Burt) and my right hon. Friend the Member for Maidenhead. The Under-Secretary's concession of an offer to revisit TENs is tantamount to accepting that the Act has got it wrong. Although it is reassuring to know that he spoke to representatives of ACRE only today, they must have told him what they told us back in spring 2003. ACRE was not offered meetings then, and the Government arrogantly rejected its sensible proposals for practical implementation of the new licensing regime.
	We tabled amendments to address the key issues of the number of temporary permissions, the special case for voluntary and non-profit-making organisations, increased costs for licensing and the added administrative burdens for volunteers in village communities. The relevant amendment in Committee was No. 213, which was moved at column 456 of the Official Report of Standing Committee D on Thursday 8 May 2003. The Under-Secretary need look no further because ACRE gave us that amendment, which deals exactly with the points raised in the debate. It defines a voluntary organisation and it requested the number of TENs to be increased from five to 24. The Government conceded 12. The Under-Secretary's offer to reassess that is welcome but it is frustrating that that could have been sorted out more than a year ago.
	Many hon. Members raised the time scale for implementation, including my right hon. Friend the Member for Maidenhead, the hon. Member for Bath and the hon. Member for West Bromwich, West. The cut-off date of 6 August for transitional applications is probably set in stone at this late hour. However, the second appointed day is not. We still await the statutory instrument to legitimise the date. Since there is no time, I suggest that, before the House goes into recess, the Under-Secretary must be reserving his option to monitor developments through the recess and well into October. I predict that, if a backlog remains, thereby choking up local authority licensing committees, the statutory instrument will not confirm 24 November but a date that is, as my right hon. Friend requested, well into the new year 2006.
	We can well understand the Minister's reluctance to indicate any slippage at this juncture, but if the fears of many of those directly involved are realised, the sheer volume of applications sitting with local authorities and the cases queuing up for appeal hearings will force the Minister to do a major U-turn. As with so many sensible and practical suggestions relating to this legislation, "You heard it here first!"

Richard Caborn: Yes, but it was a very measured one. He homed in on a problem that has been discussed again this evening, namely that of village halls. We will take those issues on board through the high-level committee. One issue has been taken out of context today: Members said that there had been just one meeting with ACRE. There has been a whole series of such meetings, and ACRE welcomed the fact today that we had moved on temporary licensing. I should like to quote ACRE's newsletter of June 2005. It states:
	"ACRE (Action with Communities in Rural England) has been following the implementation of the Act and working with the Communications and Strategy Team at DCMS who have been very helpful in explaining the new processes and providing guidance and legal interpretation of the new legislation. They have set up the Live Music Forum to encourage the provision of live music in licensed premises . . . and published Countdown to explain the Act in a user-friendly way . . . Training sessions for village hall advisers have also taken place with the support of DCMS".
	I am not going to say that all the problems have been resolved. Clearly they have not, and a great deal of concern has been expressed this evening. However, let us be clear that what we are trying to do with this piece of legislation is to modernise in a way that most sensible people would want us to. We are reducing bureaucracy by merging six regulatory regimes into one. That is important for this country. This is about bringing the licensing regime into the 21st century. Central to that is the empowerment of local communities by increasing their right of intervention, which will be particularly important in licensing cases. The Act will enhance the democratic accountability and empowerment of local authorities; that is where we believe such powers should lie.
	On the problems of binge drinking in modern society, we have removed the nuclear option that existed before. We have expanded police powers the better to enable the police to respond in a proportionate way when tackling crime and antisocial behaviour. That has been welcomed by many, particularly those in the police force and in the Association of Chief Police Officers, which recently reaffirmed its support for the Act.
	The Act merges six complicated and, in some cases, outdated regulatory regimes into one. This will affect about 190,000 licensing authorities. We accept that there will be problems with implementation, but we shall be able to implement the provisions in regard to fees and to the operation of the Act, particularly for village halls and sports clubs. The hon. Member for North-East Cambridgeshire (Mr. Moss) did not choose a very good example of a club. Yesterday at Question Time, the hon. Member for Wimbledon (Stephen Hammond) mentioned Wimbledon cricket club. The club has an adult membership of 1,200, and an additional 800 junior members. It has a 9-acre site and is one of the wealthiest clubs in the country, thanks to the six-figure sum paid to it by its neighbour, the All England Lawn Tennis and Croquet club, which uses the site for car parking and corporate hospitality. It is therefore quite a wealthy club. I know that some Conservative Members might want to prosecute their case that such clubs should not pay the licence fee, but that would be wrong.
	The main reason for this major piece of modernisation is something that the Opposition have been crying out for for years, namely the reduction of red tape and bureaucracy. That is what we are going to achieve. We are moving the whole licensing regime in a direction that many people in the tourism industry have been calling for. We have debated the tourism industry many times in the Chamber, and discussed how we want to modernise it and to increase its activity. The Act provides the tools to do that.
	In relation to entertainment, which is linked to tourism with regard to central London, it is important that we modernise our licensing regimes. The chairman of the British Beer and Pubs Association said as late as 15 May this year that the Government
	"have delivered flexibility. We have seen the back of the ludicrous 11 pm closing time."
	Therefore, the Act has had tremendous support across the board.
	In terms of sports clubs, no Government have helped truly amateur sports clubs more than we have. We introduced mandatory rate relief, for which there have been calls for more than 30 years, and our investment in amateur sports clubs is second to none. If there are problems with genuine sports clubs, we will consider that, as I said that we would with regard to village halls.
	I cannot do justice to all the points raised this evening, but I will respond in writing on those that I do not cover. Let me just respond to the point made by the Opposition spokesman about 24-hour opening not being an issue. The right hon. Member for Haltemprice and Howden (David Davis), who might be the new leader of the Conservative party, said on 30 June,
	"What on earth is the Government doing? In the face of these figures, its policy of 24-hour drinking is nothing short of madness."
	And on 8 June, he said:
	"Given that a lot of violent crime is caused by binge drinking, it beggars belief that the Government are going ahead with 24-hour opening".
	How can Opposition spokesmen say that there is no disagreement about 24-hour opening? They ought to get their act together.
	As for the comments of the hon. Member for Bath (Mr. Foster)—[Interruption.] The Yorkshire pronunciation is "Bath", although I know that it is "Barth" down there. I think it is also "Bath" in Scotland. On the question of delay, the hon. Member for Bath accused me, as the then Minister with responsibility for licensing, of procrastination and of not bringing the measure forward. At the turn of the year, he changed his mind, as the Liberals are prone to do, and now argues that he wants a delay. We never know where the Liberals stand. On the one hand they argue that they want a delay, while on the other they say they do not. But I assure you, Mr. Speaker, that there is no delay. We will make sure that the Act is implemented.

Malcolm Bruce: I believe myself fortunate to secure this debate on the proposed closure of the Met Office in Aberdeen in my constituency, just a week before the House rises for the summer. The proposal has caused widespread dismay and consternation, as the Aberdeen office is the only civilian weather forecasting operation in Scotland. I express my appreciation for the cross-party support that the campaign to have the decision reversed has gathered.
	I note with satisfaction that the Minister has made it clear that the final decision is his. I am glad that I and others will have the chance to press the case with him tonight, although the campaign will not end with this debate.
	My first concern has to do with the way that the decision has been handled. Staff learned through an internal e-mail that the option to close all six branches had been chosen by the Met Office board. Internal consultation was then initiated on the basis of a done deal. Not surprisingly, that caused anger and resentment, and the information was then leaked into the public domain rather than announced in an orderly fashion by the Met Office management.
	At present, there are six Met Office branches apart from the headquarters in Exeter. The one in Aberdeen is the only one in Scotland, and the others are in Belfast, Cardiff, Manchester, Birmingham and London. Of course, there have been management changes in the Met Office. The decision by Dr. David Rogers to leave following his marriage clearly created a hiatus. I understand that he finishes at the end of this week, and that he may have attended his last board meeting today. It is perhaps worth putting it on record that he stated in his farewell message:
	"It has been a privilege to lead the Met Office during this period of transformation"—
	an odd word, I think—
	"and I believe that I will leave the organisation strongly focused and committed to meet the challenges in the future. I would like to take this opportunity to relay again my personal thanks to all Met Office staff for helping me to determine the new strategic direction for the organisation and for putting in place a clear vision and robust plan for the future. I wish the Met Office, and its excellent people, every success for the future."
	The Minister will understand that that has a hollow ring with people in Aberdeen. After all, this time last year Dr. Rogers said:
	"I want the Met Office to work with Government to help to mitigate the impacts of severe weather. This goal can only be achieved if we maintain a significant regional presence and my wish to focus on services which improve public safety. Aberdeen Met Office is a great example of somewhere this has already happened. Everything they do is focused on protecting life at sea. This is a model."
	What has happened in the past 12 months to produce that complete about-turn? Only last September, a strategic decision was taken to transfer the shipping forecast and gale warnings from Exeter to Aberdeen. In that short time—less than a year—staff at Aberdeen have achieved a 35 per cent. increase in accuracy, for which the team recently received a performance bonus, yet management now want to transfer the service back to Exeter.
	I do not know whether the Minister will want to comment, but I can tell him that there is a suspicion that the change of policy was driven by the cost overruns in the move to Exeter. When his predecessor,, Ivor Caplin, accepted the new headquarters at the end of 2003 he described it as
	"within budget and under a strict timetable",
	yet in a recent reply to me the Minister confirmed that there was a cost overrun of £7.9 million. It is estimated that the option recommended by the board—closure of all the branches—will save £3,652,000 over five years and £20,691,000 over 10 years.

Don Touhig: I congratulate the hon. Member for Gordon (Malcolm Bruce) on obtaining this Adjournment debate and I welcome the opportunity to talk about the work of the Met Office, and the Aberdeen Met Office in particular. I am grateful to him for giving me advance notice of the main issues that he wanted to raise, and I will attempt to answer his points. If I fail to answer anything, I will consult Hansard tomorrow and write to him if I need to do so.
	I recently launched a consultation exercise on the options for change of the Met Office's structure. I should like to explain the background of those changes, together with the context in which they are being considered. I plan to visit the Met Office in Exeter later this month, and I will take the opportunity while there to discuss the issues involved with the Met Office executives. I have also agreed to meet representatives of the Prospect trade union, and I expect to meet parliamentary colleagues on this matter in the near future.
	I have written to the hon. Gentleman and to other hon. Members whose constituencies or constituents may be affected by any change to the Met Office's current structure and organisation. I do, however, need to make it clear at the outset that no decisions have been taken or are assumed. I have initiated a 90-working-day consultation period, the purpose of which is to find the most effective and efficient way for the Met Office to carry out its civil forecasting task. I welcome any representations, and I shall make my decision after considering and evaluating all the representations that I receive.
	The Met Office's primary function is vital: to understand the science of the weather and the environment. It does an important job in providing forecasts and information and helps to save lives and protect property. We look to the Met Office, as the national meteorological service, to provide timely, quality weather forecasts, particularly in respect of predicting and broadcasting warnings of severe weather.
	The Met Office has continually invested in improving its computer forecasts through the increasing understanding of the science and the utilisation of massive supercomputer power. That helps to maintain its reputation for excellence and to ensure that it can deliver the weather services that we require now and in the future.

Lembit �pik: As the Minister knows, I am a great admirer of weather forecasting and, indeed, of weather forecasters. On the science, does he accept that, while the supercomputers are important, there will always be an element of expertise, which other hon. Members have already mentioned? The great strength of sharing that experience across the country is that the local expertise that brings in the business is effectively on site in those regions to deliver results. Will he accept representations, including from Wales, about the case for maintaining that regional expertise in its current locations?

Malcolm Bruce: Does the Minister not accept that for people in the environment of the North sea, whether they are involved in fishing, maritime activities or offshore helicopter activities, the same factors apply? Their inability to call up information that the military can access is anomalous. Surely a national Met Office should provide such information to the civilian sector.